Quarterly profits up sharply at Dole Food
Associated Press
WESTLAKE VILLAGE, Calif. — Dole Food Co. said yesterday its second-quarter net income leaped 81 percent as margins improved and it reduced its tax rate.
The world's largest producer of fruits and vegetables also said it would start expensing stock options and move leases onto its balance sheet to make its financial statements clearer.
Dole reported second-quarter net income of $66.8 million, or $1.18 a share, a sharp rise from the $37 million, or 66 cents a share, in the year-earlier period.
Revenue was flat at $1.1 billion, the company said.
Dole, with headquarters in Westlake Village, Calif., said its basic businesses, with the exception of fresh-cut flowers, continued to benefit from improved margins and its cost-cutting programs.
The fresh-cut flower business represents 4 percent of total revenue and had a loss before interest and taxes of about $2 million for the quarter.
Dole said the flower industry has proven less attractive than the company anticipated when it made four acquisitions in the industry in 1998, and integration of the businesses has been slower than expected. As a result, the company said it would take a charge of $119.9 million for the write-off of goodwill associated with the fresh-cut flower business.
Accordingly, net income for the first six months of this year fell to $3.2 million from $71.7 million in the corresponding period of 2001.
Dole announced it will move three off-balance sheet operating leases, totaling about $190 million, onto its balance sheet. Dole said the move won't have any material effect on the company's income statements or cash flows.
Such leases have been criticized as a way of keeping debt off balance sheets.
Also, joining some other companies such as Coca-Cola Co., Washington Post Co. and Bank One Corp., Dole said it will expense the cost of all employee stock options, beginning with the next annual grant in options in the first quarter of 2003. The company hasn't yet determined how the change in accounting for stock options will affect future earnings.
Shares of Dole closed at $26.63 yesterday on the New York Stock Exchange, down 28 cents, or 1 percent.
