October 3, 2022
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Dole earnings up in Q2, but company again cuts full-year guidance

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Westlake Village-based Dole beat analysts’ expectations when it reported positive earnings per share for the second quarter on Aug. 23, but the company also slashed its guidance for revenue and earnings for the full year.

Dole, one of the largest fruit and vegetable producers in the world, is dually headquartered in Westlake Village and Dublin, Ireland. Its net income increased from $36.8 million in the second quarter of 2021 to $48.6 million in the second quarter of 2022.

The earnings report was released before the markets opened on Aug. 23, and Dole shares 1.7% from the previous day to close at $8.84.

Dole plc was formed last year with the merger of Dole Food Company and Total Produce. The new company went public on July 30, 2021. It opened at $15 per share, and since then, Dole’s stock is down 41%.

“We recently marked the one-year anniversary of the completion of the IPO and the merger of Total Produce and Dole Food Company,” Johan Linden, Dole’s chief operating officer, said during the company’s earnings call. “The merger has brought together two highly synergistic and complementary organizations, establishing Dole plc as the global leader in our industry.”

In the second quarter, Dole’s reported adjusted earnings per share were 44 cents, down from 74 cents per share in the same quarter last year. 

Still, despite the drop, that number beat analysts’ expectations. According to FactSet, analysts covering Dole were expecting earnings per share of 37 cents.

Dole’s revenue also received a nice bump, as the company generated $2.36 billion in the second quarter, doubling last year’s mark of $1.21 billion.

But, on a pro forma basis, which accounts for the Total Produce merger, revenue actually dropped about 3%.

Dole missed analysts’ expectations of revenue of $2.5 billion for the second quarter.

The company also announced that it would be cutting its revenue and adjusted earnings before interest, taxes, depreciation, and amortization for the full year.

Dole now expects revenue in the range of $9.1 billion to $9.4 billion, down from the prior guidance of $9.4 billion to $9.7 billion. 

Adjusted EBITDA was cut to $330 million to $350 million, a 5.5% reduction from previous guidance.

This is the second time this year Dole has reissued guidance for both revenue and adjusted EBITDA. Originally, the company expected revenue to be between $9.6 billion to $9.9 billion and adjusted EDBITDA to be between $370 million and $380 million.

“Due to a slower than anticipated return to full operating profitability in our fresh vegetables and the increasing impact on translation due to the significant strengthening of the U.S. dollar, we believe it is prudent to reduce our full-year adjusted EBITDA guidance,” Linden said.

Linden said he was “disappointed” with Dole’s vegetable category in the second quarter, which decreased 6% year-over-year to generate $309.2 million.
Adjusted EBITDA was a loss of $5.9 million in the category, as opposed to a loss of $1.2 million in the same quarter a year earlier.

There was improvement in the second quarter from the first, but “not to the levels we anticipated in our turnaround plan, and we expect now to face an unfavorable environment through the second half of 2022.”

“While we remain confident in our ability to get vegetable business back to profits, we do not now expect to see a full recovery in our vegetable business until 2023,” Linden said.

Revenue from the company’s fresh produce segment for Europeon markets dropped 10.2%, to $849.8 million.

According to Dole, the loss in revenue was due to the strengthening of the U.S. dollar in the quarter against the euro, Swedish krona, and British pound. 

In addition, there was a negative impact on revenue from divestitures and acquisitions of $68.8 million in the quarter, the company said.

Dole’s fresh fruit segment was the only one that saw significant growth year-over-year, increasing 3.5% to $805.8 million.

Revenue was positively impacted by increased pricing in commercial cargo, increased pricing in North America for bananas and higher worldwide volumes and pricing in pineapples, partially offset by lower pricing in non-core markets for bananas, Dole said.

On a positive note, Linden mentioned Dole is seeing stabilization in prices for fertilizer, packaging and fuel.

Dole ended the quarter with $238.7 million in cash and cash equivalents and net debt of $1.06 billion.