Stock research on global mid-cap companies

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Stock research on global mid-cap companies, Evaluate Research

Equity Bottom-Up

Fresh Del Monte Produce / Equity Bottom-Up

FDP reported results for the fourth quarter and year ended December 2017. Revenue for the quarter came in at $953.7 mn vs. $954.6 mn in 4Q2016 while EPS was -$0.08 vs. +$0.26 in the corresponding period last year and our estimate of $0.22. The main reason for the fall in EPS was an increase in income tax which was an expense of $6.0 mn in 4Q2017 vs. a benefit of $13.6 mn in 4Q2016. In fact, the profit before tax for the quarter was higher in 4Q2017 at -$0.7 mn vs. -$3.1 mn in 4Q2016. Gross profit for the period was $51 mn vs. $56.5 mn in 4Q2016. The decline in gross profit was on account of fall in profit from the Other Fresh Produce and the Prepared Food segments. After facing severe margin pressures over the past 1 year due to oversupply in the market, the Banana segment [which accounts for about 43%/34% of the company’s revenues/ gross profits] showed a significant improvement for the first time this quarter. The last one year witnessed one of the most challenging banana markets in many years as the market was flooded with excess supply throughout the period resulting in lower ASP and margins. However, the situation now seems to be much better with a more balanced demand and supply condition. This has resulted in a substantial improvement in the segment gross profits from $4.6 mn in 4Q2016 to about $14.7 mn this quarter.
Analyst: Ajeya Patil

FDP reported results for the fourth quarter and year ended December 2017. Revenue for the quarter came in at $953.7 mn vs. $954.6 mn in 4Q2016 while EPS was -$0.08 vs. +$0.26 in the corresponding period last year and our estimate of $0.22. The main reason for the fall in EPS was an increase in income tax which was an expense of $6.0 mn in 4Q2017 vs. a benefit of $13.6 mn in 4Q2016. In fact, the profit before tax for the quarter was higher in 4Q2017 at -$0.7 mn vs. -$3.1 mn in 4Q2016. Gross profit for the period was $51 mn vs. $56.5 mn in 4Q2016. The decline in gross profit was on account of fall in profit from the Other Fresh Produce and the Prepared Food segments. After facing severe margin pressures over the past 1 year due to oversupply in the market, the Banana segment [which accounts for about 43%/34% of the company’s revenues/ gross profits] showed a significant improvement for the first time this quarter. The last one year witnessed one of the most challenging banana markets in many years as the market was flooded with excess supply throughout the period resulting in lower ASP and margins. However, the situation now seems to be much better with a more balanced demand and supply condition. This has resulted in a substantial improvement in the segment gross profits from $4.6 mn in 4Q2016 to about $14.7 mn this quarter.
Analyst: Ajeya Patil

Fresh Del Monte Produce

Improving Outlook