Chiquita Brands weathers a challenging 3Q
Nov 6, 2006 10:22 AM, from staff and wire reports
Chiquita Brands International’s net sales increased to $1.0 billion in the third quarter of 2006, up 8 percent from $954 million in third quarter 2005.
The company reported a quarterly net loss of $96 million, including a non-cash charge of $43 million for goodwill impairment at Atlanta AG, the company's German distributor. In the third quarter 2005, the company reported net income of $0.3 million.
"Our third quarter results were disappointing and worse than expected for several reasons," said Fernando Aguirre, chairman and chief executive officer. "First, we recorded a non-cash charge for goodwill impairment at Atlanta AG due to a decline in its business performance resulting primarily from intense pricing pressure in Germany. Second, temperatures during the third quarter reached record highs across much of northern Europe. This unusually hot weather reduced consumer demand for bananas, depressed prices, and contributed to substantial price weakness in trading markets, where we incurred substantial losses on the sale of temporary excess supply from Latin America. Third, beginning in September, our Fresh Express operations experienced lower sales and unforeseen costs due to consumer concerns regarding the safety of fresh spinach in the United States, despite the fact that no confirmed cases of consumer illness were linked to our Fresh Express products.”
