Posted on: Tuesday, June 19, 2001

Dole predicts higher second-quarter profits

Bloomberg News Service

WESTLAKE VILLAGE, Calif. — Dole Food Co.'s second-quarter earnings will beat forecasts because the world's largest fruit and vegetable producer is getting higher prices for bananas and pineapples and cutting costs.

Dole, which was founded in Hawai'i and is still a major property owner in the state, said profit from continuing operations will be $49 million to $52 million, or 88 cents to 93 cents a share. In April the company said it would earn 55 cents to 65 cents per share in the second quarter.

The European Union and the U.S. agreed in April to settle an eight-year trade dispute over bananas that had hurt Dole's sales in Europe. At the time Dole criticized the agreement, saying it unfairly favors its chief rival, Chiquita Brands International Inc. Yesterday Dole said "favorable banana pricing in Europe" contributed to improved earnings.

Dole said earnings also have improved because the company has spent the past two years cutting jobs and consolidating operations to cut costs.

For example, it now orders some supplies through one office rather than have each region order the same equipment, spokesman Kenneth Kay said.

"It's clear in our mind that they're making the right moves," US Bancorp Piper Jaffray analyst George Dahlman said. He had forecast Dole to earn 60 cents a share.

In the second quarter, Dole said it will have a gain of $5.4 million, or 9.7 cents a share, for the sale of investments, and take charges of $20.4 million, or 36.4 cents, for shutting down its California deciduous and Northwest apple businesses. That will make net income $34 million to $37 million, or 61 cents to 66 cents a share.

Dole shares rose .98 cents to $16.40.