Dole loses 11% on mixed first quarter performance

Dole plc (NYSE: DOLE) is one of the world’s leading producers of fresh fruits and vegetables. Specifically, it is among the industry’s major players in the production of fresh bananas and pineapples, as well as a leader in value-added salads and packaged fresh vegetables.

With strong economies of scale resulting in operational efficiencies, the company also strives for recognition in categories such as berries, avocados and organics.

Recently, Dole released mixed results for the first quarter of 2022. Additionally, it provided a decent outlook for the full year of 2022.

Following the update, shares of Dole were down nearly 11% at Tuesday’s close. Meanwhile, the stock rose 2.72% after hours.

Results in detail

Total revenue of $2.2 billion was down slightly year-over-year and beat analysts’ expectations of $2.3 billion. Revenues were impacted by a decline in the Fresh Vegetables segment and unfavorable currency movements.

Meanwhile, Dole reported first-quarter adjusted earnings per share of $0.30, above the consensus estimate of $0.29. The company reported adjusted earnings of $0.62 per share in the same quarter last year. Adjusted EBITDA was $81.5 million, down 37.8% year-over-year.

In terms of segment, Fresh Fruit generated revenue of $749.8 million, up slightly year-over-year, while Diversified Fresh Produce – EMEA revenue of $791.2 million was almost compliant. Additionally, the Diversified Fresh Produce – Americas & ROW segment reported revenue of $463.7 million, up 10%.

In contrast, revenue from fresh vegetables fell 16.2% to $274.8 million. The packaged salad recall and temporary plant closures impacted value-added salad volumes, resulting in lower revenues.

Outlook

For 2022, the company forecasts total revenue of between $9.4 billion and $9.7 billion, compared to a consensus estimate of $9.7 billion. Adjusted EBITDA is expected to be in the $350-370 million range, down from prior expectations of $370-380 million on macro issues.

The Taking of Wall Street

The Street is cautiously bullish on the stock, with a Moderate Buy consensus rating based on 2 buys. The average Dole price target of $19.50 implies 96.77% upside potential.

Smart Score

According to TipRanks’ Smart Score system, Dole scores a 5 out of 10, indicating that the stock is likely to perform in line with market averages.

Final remarks

Currently trading near its 52-week low, Dole has lost nearly 26% so far this year. Therefore, investors buying the dips might consider investing in the stock as it performed well last year and has a strong market position in the industry.

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