Shares of Dole Food Co., the world’s largest marketer of fresh produce, fell the most in more than 16 months Wednesday after the company said profit from its fruit unit is declining.
In late New York trading, Dole fell 13 percent to $10. The stock earlier fell as much as 16 percent, the biggest intraday decline since Aug. 5, 2011.
Dole expects to report earnings before interest, taxes, depreciation and amortization of $150 million to $170 million this year, the Westlake Village, California-based company said Wednesday in a statement.
“The fresh fruit business of the new Dole is continuing to experience declining earnings,” General Counsel C. Michael Carter said in the statement. The company is facing “aggressive contract negotiations in the North American banana market even though costs are higher.”
Wednesday’s forecast includes the $1.69 billion sale of its Asia fresh fruit and global packaged-food businesses to Itochu Corp., which is expected to close “in early 2013,” according to the statement.
Chairman David Murdock, who was chief executive officer from 1985 to 2007, will return to that post to lead Dole’s focus on North America and Europe and Carter will become president.
Jonathan Feeney, a Philadelphia-based analyst at Janney Montgomery Scott who rates the shares buy, cut his estimate for 2013 Ebitda to $151 million from $206 million, in a research note Wednesday.
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