Fresh Del Monte stock set to drop toward a 3-month low as lower banana sales lead to earnings miss

Shares of Fresh Del Monte Produce Inc.
FDP,
-0.21%
were indicated down nearly 4% toward a three-month low in premarket trading Monday, after the fresh fruit and vegetable producer missed fourth-quarter earnings expectations, as lower banana sales offset by higher prices of most products, such as avocados and pineapples. The company swung to a net loss of $106.4 million, or $2.22 a share, from net income of $18.3 million, or 38 cents a share, in the year-ago period. Excluding nonrecurring items, $131.2 million impairment charge related to its Mann Packing operation, adjusted earnings per share of 25 cents missed the average estimate of two analysts compiled by FactSet of 31 cents. Sales fell 3% to $1.01 billion, below the FactSet average estimate of $1.03 billion, as banana sales dropped 6% to $379.6 million and fresh and value-added product sales inched up 1% to $582.8 million. Separately, the company raised its quarterly dividend by 25%, to 25 cents a share from 20 cents a share. Based on Friday’s stock closing price of $23.92, the new annual dividend rate implies a dividend yield of 4.18%, which is nearly triple the implied yield for the S&P 500 of 1.41%. The stock has lost 8.9% year to date while the S&P 500 has gained 6.7%.