UPDATE 3-Dole Food shares fall 1.8 pct in debut

* Dole shares finish first day at $12.28

* Dole sells 35.7 mln shares in IPO, raising $446.4 mln

* With Dole, 10 of 17 IPOs since Sept. below IPO price (Updates with closing price, detail on first day performance)

By Phil Wahba

NEW YORK, Oct 23 (Reuters) - Dole Food Co Inc (DOLE.N) shares fell 1.8 percent in their debut on the New York Stock Exchange on Friday after its initial public offering priced below expectations amid concerns about the fresh fruit and vegetable producer's debt and vulnerability to commodity prices.

Dole's shares lost 22 cents, or 1.8 percent, to close the day at $12.28.

The Dole IPO is the latest to struggle in the surge of new offerings since Labor Day. Including Dole, 10 of the 17 U.S.- listed IPOs since then were trading below their offer prices as of the close on Friday, including several that had priced below expectations.

Historically, IPOs have tended to rise 10 percent to 12 percent in their first day of trading.

Dole has a dominant market share in a number of its well- known products, such as bananas and fresh fruit cups, but it is nonetheless vulnerable to commodity prices, an analyst said.

"Dole lacks pricing power -- produce is a commoditized sector, and consumers are more likely to consider price than brand," said Erin Swanson, an equities analyst with Morningstar.

The Westlake, California-based company's $1.9 billion debt load also raised concerns about the IPO, some analysts have said. [ID:nN2257982]

In the first half of 2009, Dole paid $74 million in interest expenses, but only had $131 million in operating income, given the notoriously thin margins in the fruit and vegetable business.

Its falling sales have also given some investors pause.

For the first half of 2009, the company's sales fell 11.1 percent to $3.3 billion and profits slid 18.3 percent. It had 2008 revenue of $7.6 billion.

"Dole Foods with its huge indebtedness and decreasing sales became another casualty of the newly value-oriented IPO buyer," advisory firm IPO Boutique said in a note on Friday.

Dole has been making efforts to lower its debt. The IPO's proceeds will mostly go to paying down debt and, in 2008, Dole started selling off "noncore assets." According to its IPO prospectus, those efforts helped it pay down $480 million of debt in the 15 months leading up to June 20.

Investor David Murdock bought a controlling interest in Dole's predecessor company, Castle & Cooke Inc, in 1985, and became chairman and chief executive. The company changed its name to Dole in 1991.

Murdock, who took Dole private in 2003 in a $2.5 billion deal, will still own 59 percent of Dole's shares after the IPO, according to the filing. [ID:nN2257982]

Dole sold 35.7 million shares in its IPO, raising $446.4 million. Dole had expected the shares to price between $13 and $15 each. (Reporting by Phil Wahba; editing by Gerald E. McCormick and Andre Grenon)