Thursday, March 30, 2000
Dole decides against selling
Earnings could beat estimates
Bloomberg News and The Cincinnati Enquirer
WESTLAKE VILLAGE, Calif. — Dole Food Co., the world's largest producer of fresh fruit, Wednesday said it decided not to sell the company after exploring options and said it expects first-quarter earnings to beat analysts' estimates.
Dole hired Goldman, Sachs & Co. in January to explore alternatives, including a sale. The investment bank completed its study, and a sale at this time wouldn't result in shareholders “receiving the full intrinsic value of the company's business,” Dole said in a statement.
The company said it probably will report earnings of 60 cents to 65 cents a share. Dole was expected to earn 49 cents, the average estimate of three analysts polled by First Call/Thomson Financial.
Dole earned 52 cents a year earlier. Earnings have improved in Dole's banana business because of cost-cutting moves started last year, the company said.
The European Union last year boosted the number of banana-import licenses granted to Latin American nations, such as Ecuador and Colombia, causing a surplus that reduced prices and squeezed Dole's profit margins. That led Dole to close banana operations in Nicaragua and Venezuela.
Dole's banana-industry woes also have affected Cincinnati's Chiquita Brands International Inc. The same industry conditions caused problems for Chiquita, including a $58.4 million loss in 1999 and a suspension of the company's common-stock dividend.
Chiquita officials have predicted a turnaround this year.
Dole said Wednesday that it had talks with a number of parties, including San Miguel Corp. of the Philippines, about possible business combinations, though no agreements were reached and all talks ended. San Miguel said Monday that it was interested in buying a stake in Dole.
Dole also said it might sell a brewery and soft-drink business in Honduras and other “noncore assets and substantially underperforming businesses” to reduce debt.
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