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Analyst Endorses Chiquita's Focus

Chiquita Brands International Inc. has a good chance at being successful with its strategy of refocusing on core businesses like bananas and pineapples and becoming more efficient, said a Janney Capital Markets analyst after the produce company reported a big fourth-quarter loss.

(AP) — Chiquita Brands International Inc. has a good chance at being successful with its strategy of refocusing on core businesses like bananas and pineapples and becoming more efficient, said a Janney Capital Markets analyst after the produce company reported a big fourth-quarter loss.

The Charlotte, N.C., company said Monday that it lost $335 million, or $7.24 per share, in the quarter that ended Dec. 31, as heavy charges weighed on its performance. That compares to a loss of $16 million, or 36 cents per share, in the final quarter of 2011.

Revenue rose 2 percent to $738 million, as better pricing in Europe and increased volume in North America helped banana sales grow.

Chiquita booked non-cash impairment charges totaling $180 million in the quarter due in part to lower operating performance of its retail salad business. It also recorded a $130 million non-cash income tax charge in the quarter to establish a valuation allowance against U.S. federal and state deferred tax assets, something that is required if it becomes more likely than not that an asset, or a portion of it, will not be realized.

Last August, the company announced a cost-cutting plan aimed at saving $60 million annually by streamlining its administrative and manufacturing costs. Chiquita also totaled $2 million in restructuring expenses for that in the fourth quarter.

Chiquita named former Diversey Inc. executive Edward F. Lonergan as its CEO and president in October, succeeding Fernando Aguirre.

Janney analyst Jonathan Feeney said in Tuesday morning research note the company's new focus on maximizing cash flow "is a sensible strategy being swiftly executed."

Its shares ended at $6.75 on Monday. Its shares have traded in a 52-week range of $4.62 to $9.80.