UPDATE 2-Fresh Del Monte Q2 profit beats Wall Street view

Tue Aug 3, 2010 10:34am EDT

* Q2 adj EPS $0.85 vs est $0.73

* Q2 net sales up 2.2 pct to $1.00 bln

* Gross margins fall in part due to lower selling prices

* Shares down 3 pct on low volumes (Adds details, updates share movement)

Aug 3 (Reuters) - Fruit and vegetable producer Fresh Del Monte Produce Inc (FDP.N) posted a better-than-expected quarterly profit, helped by higher demand for bananas in the Middle East and North America.

However, the company's gross margins in the quarter fell partly due to lower selling prices of bananas and its gold pineapple product line, and higher fuel expenses. Gross profit was $83 million compared with $91 million in the year-ago quarter.

Fresh Del Monte's margins were also hit by adverse weather conditions in its Guatemala banana production areas that resulted in higher costs related to fruit production and procurement.

Second-quarter net income attributable to the company was $21.1 million, or 34 cents a share, compared with $52.2 million, or 82 cents a share, a year ago.

Excluding items, quarterly profit was 85 cents a share, beating the average analysts' estimate of 73 cents a share, according to Thomson Reuters I/B/E/S.

Net sales increased 2.2 percent to $1.00 billion.

The company also posted sequentially higher net sales of $262.3 million in Europe.

Last week, rival Chiquita Brands International Inc (CQB.N) said its quarterly results were boosted by stronger results at its European business.

Shares of the company were down 3 percent at $20.45 on low volumes Tuesday morning on the New York Stock Exchange. (Reporting by Mihir Dalal in Bangalore; Editing by Vinu Pilakkott, Anne Pallivathuckal)