Chiquita is blaming the loss on higher product costs –
annual expenses jumped $60-65 million because of higher fuel prices, and the cost of buying bananas, lettuce and market fertilizer.
Full-year expenses will now total $240-265 million.
The company expects to continue strong year-over-year improvements in operating performance for the full-year of 2008, based largely on very strong first-half results.
However, Chiquita continues to expect that “the second half will be challenging.” The company didn’t specify the amount of the expected loss nor issue forecasts for earnings and sales.
Analysts on average are predicting Q3 net income of $0.03 a share and profit of $2.31 a share for 2008. Meanwhile, BB&T Capital Markets downgraded the name, noting that although some of Chiquita’s higher cost estimates will be offset by gains on fuel hedges, net costs will likely still increase by about $48-53 million. BB&T also projects Chiquita’s European launch of its “Just Fruit in a Bottle” product will also require
“significant unforeseen spending.