Dole Food Co. announced profits far exceeding analyst expectations as its expenses for fruits and vegetables were less than expected.
The Westlake Village produce company reported net income of $25 million (28 cents a share) in the quarter ended June 15, compared to net income of $61 million (69 cents) for the same period a year earlier. Revenue increased 10 percent to $1.2 billion.
Analyst had forecast 11 cents a share and revenue of $1.1 billion, according to Thomson Financial Network.
C. Michael Carter, Dole’s president and chief operating officer, said costs for fresh fruit was about $15 million lower than expected, mainly due to North American bananas, and fresh vegetables was approximately $14 million lower than expected, mainly due to berry prices.
The company is now significantly smaller than last year because of the $1.7 billion sale in April of its global packaged-goods business and Asia fresh-foods business to Itochu Corp. of Japan. The business accounted for about a third of revenue and half of profits.
“The results this quarter are reflective of the inherent volatility and unpredictability of earnings from Dole’s smaller footprint as an international commodity produce company,” Carter said in a prepared statement.
Last month, the company received an offer from its 90-year-old chief executive to take the company private again. David Murdock offered $12 a share to buy the company in a deal that valued Dole at roughly $1.5 billion including debt.
The deal would have Murdock pay shareholders $645 million for the 40 percent stake that the Los Angeles billionaire does not control. The offer represented an 18-percent premium over the share price the day the offer was made.
Dole has appointed a special board committee to review the proposal.
Shares closed up 1 cent, or a fraction of a percent, at $12.79 on the New York Stock Exchange.