What happened
Well known fruit and vegetable company Dole (DOLE 0.93%) reported a strong first quarter, with net income soaring compared the prior-year period. Dole has been a big stock market winner this year with shares surging about 36% year to date. That includes a pop of 8.6% today as of 10:50 a.m. ET.
So what
Net income soared to more than $14 million in the first quarter versus a loss in the prior-year period. Even discounting losses in both periods from discontinued operations, income rose over 15% year over year. Revenue rose 1% year over year to $2 billion. Investors' positive reaction to the report came from the management's projection that full-year financial targets are likely to be met despite weather and supply chain headwinds.
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Now what
Dole still sees adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $350.0 million for full-year 2023 from its continuing operations. That's an increase from 2022 thanks to improvements in supply chain and logistics efficiencies.
Headwinds from weather events, including heavy rains in California that are affecting the vegetable and berry crops in the region, are being somewhat offset by stable fuel prices, lower inflation, and favorable currency moves.
Earlier this year, Dole announced it is selling its fresh vegetable division for $293 million. Results from that segment were included as discontinued operations in the quarterly report. The company will now focus on global sales of fresh fruit and diversified produce sales. Prices for fruit increased versus last year, helping to drive the year-over-year increase in revenue. Dole said consumers bought more bananas but fewer pineapples versus last year. Today, investing consumers are focusing on buying Dole's stock.
