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CORAL GABLES - On Wednesday, Fresh Del Monte Produce Inc . (NYSE:FDP) reported second-quarter earnings that significantly exceeded analyst expectations, with adjusted earnings per share of $1.23 beating estimates by $0.28 and revenue of $1.18 billion surpassing the $1.16 billion consensus.
The stock edged up 0.14% in after hours trading following the announcement.
The company’s net sales rose 4% to $1.18 billion compared to the same period last year, while gross profit increased 6% to $120.1 million. Gross margin expanded by 30 basis points to 10.2%, driven by strong seasonal execution.
Growth was fueled by higher sales in both the fresh and value-added products segment and the banana business segment. The company’s specialty pineapple varieties and fresh-cut fruit offerings were key drivers of the profit gains.
"Sales growth was fueled by continued demand for our core products, including our proprietary pineapple varieties, and strong momentum across our fresh-cut business—an area where we’re seeing encouraging progress and expanding margins," said Mohammad Abu-Ghazaleh, Fresh Del Monte’s Chairman and CEO.
In the fresh and value-added products segment, which accounts for 61% of total sales, revenue increased to $722.6 million from $694.1 million a year earlier. This growth was primarily driven by higher selling prices for pineapples and increased volume and prices in the fresh-cut fruit product line due to strong market demand.
The banana segment, representing 35% of sales, saw revenue rise to $410 million from $394.3 million in the prior-year period, mainly due to higher selling prices across all regions.
The company maintained a strong balance sheet with long-term debt decreasing to $201 million at the end of the second quarter, a 29% reduction from $285 million a year earlier. Fresh Del Monte’s board declared a quarterly cash dividend of $0.30 per share, payable on September 5.
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