UPDATE 2-Chiquita Q4 loss widens, freezes executive salaries

Thu Feb 19, 2009 6:17pm EST

Related Topics

* Q4 loss $9.27/shr, including charges

* Rev flat at $839.3 mln

* Freezes executive salaries

* Sees '09 capex of $55-$65 mln

* Shares down about 10 pct (Adds conference call details, updates share movement)

Feb 19 (Reuters) - Banana distributor Chiquita Brands International Inc (CQB.N) posted a wider fourth-quarter loss, hurt by a weaker euro, higher costs and an impairment charge at its salads segment, sending its shares down almost 10 percent.

On a conference call with analysts, the company also said it has frozen executive salaries for 2009 and reduced their 2008 bonus payments by 25 percent.

In the latest fourth quarter, the company had a non-cash goodwill impairment charge of $375 million at its Fresh Express segment.

"We took a non-cash goodwill impairment charge for Fresh Express in the fourth quarter, primarily due to current economic conditions and lower category growth expectations," Chief Executive Fernando Aguirre said in a statement.

Chiquita, known for its namesake bananas and Fresh Express bagged salads, has been witnessing relatively sluggish demand for its packaged salads as thrifty consumers view them as discretionary.

However, the company said it expects to generate improved results in 2009 in both salads and healthy snacks by increasing prices, eliminating unprofitable contracts and products and improving the efficiency of its manufacturing and distribution network.

"We will continue investing and innovating in salads to leverage our number one market position," Aquirre said, adding that he expects the company to outperform in 2009, despite the general economic weakness.

Chiquita, which competes with privately held Dole Food and Fresh Del Monte Produce Inc (FDP.N) , posted a loss from continuing operations of $411.1 million, or $9.27 a share, compared with a loss of $22.5 million, or 59 cents a share, a year ago.

Excluding the impairment and other charges, it posted a loss of 74 cents a share.

Net sales were nearly flat at $839.3 million. Sales at the banana segment rose 9 percent, while revenue from salads and healthy snacks segment fell 10 percent.

Analysts on average were expecting a loss of 20 cents a share, before special items, on revenue of $890.8 million, according to Reuters Estimates.

The Cincinnati, Ohio-based company's shares were down at $11.51 in trading after the bell. They closed at $12.73 Thursday on the New York Stock Exchange. (Reporting by Amitha Rajan and Nivedita Bhattacharjee; in Bangalore; Editing by Himani Sarkar and Anil D'Silva)

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