Santa Paula-based Calavo Growers reported Sept. 5 that its third-quarter profits have more than doubled since the same period last year, largely thanks to high avocado volume and good results from its packaged food segment.
The avocado marketer and distributor said its earnings for the third quarter of fiscal year 2012 are up 109 percent to $5.7 million, or 38 cents per diluted share. Despite the strong earnings, Calavo’s per-share profits missed analyst expectations. The average analyst estimate compiled by Reuters for the third quarter was 53 cents per share.
Revenue dropped 7 percent to $153.2 million, a decline the earnings report attributed to relatively low prices for the big supply of fresh avocados. Calavo packed 700,000-plus fresh avocado cartons, a 28 percent increase in volume over last year, but the report said market volatility forced avocado prices down.
“Calavo turned in a strong showing during the third quarter, with each of our business segments contributing positively to operating results,” Calavo CEO Lee Cole said in the earnings report, adding that Renaissance Food Group, a business segment focused on packaged foods that Calavo purchased in June 2011 for $96 million, performed well.
“Several factors, however, tempered our operating performance in the most recent quarter, constraining what we anticipated would be an even stronger third period,” Cole said in the earnings report. The company’s packing operation in Michoacan, Mexico was shut down for expansion during the final two weeks of the third quarter, which the company said contributed to lower-than-expected third-quarter numbers. Additionally, the harvest of California avocados, which traditionally peaks during the third quarter, was pushed back. “We now expect to see far more California volume during the fourth quarter—an unanticipated timing shift which will favorably benefit domestic packing operations in the final period,” Cole said in the report.
Calavo shares were down 8.3 percent to $23.37 after the morning announcement.