Fresh Del Monte Produce Reports Decreased Earnings For First Quarter 2013

Fresh Del Monte Produce Inc. reported financial results for the quarter ended March 29, 2013. The company reported earnings per diluted share of $0.71 for the first quarter of 2013 compared with earnings per diluted share of $1.08 in the first quarter of 2012.

"We were pleased with the overall progress we made towards our strategic initiatives during the first quarter of 2013," said Mohammad Abu-Ghazaleh, chairman and chief executive officer, in a prepared statement. "Our team did an exceptional job spurring growth and amassing greater market share led by gains in our fresh-cut business. However, these operational achievements and stronger net sales were countered by ongoing challenges in Europe, which negatively affected our profitability."

Net sales for the first quarter of 2013 were $918.8 million, compared with $897.9 million in the prior year period. The increase in overall net sales for the quarter was driven by expanded sales in the company's other fresh produce business segment in North America and the Middle East, along with increased banana volume in the company's Middle East and North America regions.

Gross profit for the first quarter of 2013 was $98.6 million, compared with $112.4 million in the first quarter of 2012. The decrease in gross profit for the quarter was the result of weakness in the company's European banana business segment, primarily attributable to lower selling prices, a result of excess industry supply and lower consumer demand, due to the weak economy. Gross profit for the quarter was also negatively impacted by lower profitability in the company's prepared food business segment, due to lower selling prices of industrial products.

Operating income for the first quarter of 2013 was $53.5 million, compared with $65.5 million in the prior year period. The decrease in operating income was primarily due to lower gross profit, partially offset by the absence of losses incurred on disposal of property, plant and equipment during the first quarter of 2012.

Net income for the first quarter of 2013 was $41.1 million, compared with $62.5 million in the first quarter of 2012. The decrease in net income for the quarter reflects lower operating income and higher provision for income taxes.

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