Shares of Dole Food Company, Inc. (DOLE) lost ground in extended trading on Thursday, relinquishing gains from the regular session after the fresh fruit and vegetable producer said that it swung to a first-quarter loss, largely because of corporate divestures in business lines. Comparables were complex for the quarter as compared to the year prior quarter as Dole has been aiming to cut costs and gain a sharper focus on its businesses.
For the quarter, Westlake Village, California-based Dole reported revenue of $1.05 billion, down 3 percent from $1.09 billion in the first quarter of 2012. The company posted a net loss of $65.6 million, compared to a net profit of $17.2 million in the year prior quarter. Revenues were partially impacted by the 2012 sale of Dole’s German ripening and distribution subsidiary. Excluding that divesture, sales would have increased 8 percent.
On April 1, Dole completed the sale of its worldwide packaged foods and Asian fresh businesses to ITOCHU Corporation for $1.69 billion, so that segment was reported as discontinued operations. Comparable income from continuing operations, which excludes impacts from divestures and other special items, was $11 million, or 12 cents per share, versus $22 million, or 24 cents per share, in last year’s first quarter.
Wall Street was expecting EPS of 11 cents on revenue of $1.03 billion.
Income from continuing operations (which exclude divesture-related losses) in the first quarter was $4 million, or 4 cents per share, down from $26 million, or 29 cents per share last year.
Fresh fruit revenues from external customers declined from $847.6 million last year to $763.8 million. Those losses were partially offset by increased revenues in fresh vegetable from external customers, which climbed 21 percent from $238.4 million to $289.6 million.
“The new Dole is off to an extraordinary start in 2013, with the record-setting early approval from China’s Ministry of Commerce resulting in the timely completion of the sale of our worldwide packaged foods and Asia fresh businesses to ITOCHU Corporation, for $1.685 billion cash,” said C. Michael Carter, Dole’s President and Chief Operating Officer. “The timeliness of the cash proceeds from this large valuation transaction enabled us to take advantage of optimal credit market conditions, resulting in a more efficient, much lower-cost new capital structure.”
Carter was referencing a $775 million refinancing plan unveiled in April as the company looks to streamline operations and costs. The “new Dole” now consists of it fresh vegetables business in North America as well as fresh fruit business in North American, Europe, Latin America and Africa.
Shares of DOLE are up about 21 percent in the past 52 weeks, although about 30 percent off from highs hit last September. Shares are coming out soft in early Friday trading, unloading about 4 percent to $10.30 as traders react to the earnings report from Thursday evening.