Dole stock sinks following EPS miss

Investing.com -- Dole plc (NYSE:DOLE) shares fell 9% after the company reported first-quarter earnings per share (EPS) that missed analyst expectations. The fruit and vegetable producer disclosed a Q1 EPS of $0.35, which was $0.04 short of the consensus estimate of $0.39. Despite revenue slightly exceeding consensus estimates at $2.1 billion compared to the expected $2.05 billion, the stock experienced a downturn.

The company’s revenue for the first quarter decreased by 1.0% compared to the same period last year, from $2.121 billion to $2.099 billion. Net income saw a significant drop from $65.4 million to $44.2 million, a 32.5% decrease. This decline in net income was attributed to a one-time gain from the sale of Progressive Produce in the previous year, which did not recur in the current quarter. Adjusted EBITDA also decreased by 4.8%, from $110.1 million to $104.8 million.

Dole’s performance was impacted by various factors, including the net negative impact from acquisitions and divestitures, particularly the disposal of Progressive Produce, as well as unfavorable foreign currency translation effects. The Fresh Fruit segment saw a decrease in Adjusted EBITDA due to higher fruit costs following Tropical Storm Sara and increased shipping costs. However, on a like-for-like basis, the company’s revenue increased by 4.2%.

In his comments, Executive Chairman Carl McCann highlighted the company’s "good performance" and its successful refinancing of credit facilities post-quarter. He also noted the declaration of an increased dividend and upward revision of full-year Adjusted EBITDA guidance to at least $380.0 million, despite the unpredictable economic environment.

Looking ahead, Dole anticipates full-year Adjusted EBITDA of at least $380.0 million and is maintaining its guidance for maintenance capital expenditure at approximately $100.0 million. The company is also expecting some increased capital expenditure related to reinvestments in Honduras following Tropical Storm Sara, with the expectation of insurance proceeds to cover a significant portion of the costs.

The company’s revised full-year interest expense guidance remains at approximately $70.0 million, assuming base rates stay stable throughout the year and excluding any exceptional cash proceeds from disposals. Despite the challenges faced in the first quarter, Dole remains focused on exploring development opportunities to strengthen its business and drive growth in the coming years.

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