Chiquita's Best Quarter in Three Years

Last Updated Aug 1, 2008 8:58 PM EDT

Last month, things looked grim for Chiquita. It issued a forecast that the Associated Press characterized as "bleak." Sales were flat or falling, costs were rising. The company was having a hard time passing its rising costs along to consumers. A restructuring effort begun last fall had yet to bear much, forgive me, fruit. Bad weather in Central America was nipping into both volume and quality of bananas.

picheader.jpgFast-forward to today, and it's a whole new story â€" the company's best quarter in three years. Sales were up 6 percent in the second quarter, to $1 billion, though dragged down by sluggish sales of bagged salads. Despite raising its overall prices an eye-popping 35 percent, banana sales were up by 17 percent. Bananas are inelastic â€" who knew?

Adjusted earnings were $59.5 million, beating the expectations of analysts.

The produce business, of course, is prone to wild swings. But this one was wilder than most. Most likely, the weather factor wasn't as bad as had been forecast, and the restructuring â€" which has included stripping layers of management and other cost-cutting -- is starting to have an effect.

  • Dan Mitchell

    Dan Mitchell has spent the past 20 years writing and editing for newspapers, magazines, and Web publications. Currently, he writes the What's Online column for the Saturday business section of the New York Times. He has also written for the Chicago Tribune, the Minneapolis Star-Tribune, National Public Radio, Business 2.0, and Wired.