NEW YORK (TheStreet) -- Shares of Chiquita Brands International Inc. (CQB) are down -2.88% to $10.80 on heavy volume as the marketer and distributor of bananas and other fresh produce reported first quarter 2014 earnings results.
The company reported GAAP net loss of $25 million in 2014 compared to GAAP net income of $2 million 2013.
Ed Lonergan, Chiquita's president and CEO said, "Drought conditions in Central America and winter storms in North America and over the Atlantic disrupted our value chain and market demand for our products."
TheStreet Ratings team rates CHIQUITA BRANDS INTL INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHIQUITA BRANDS INTL INC (CQB) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 90.61% and other important driving factors, this stock has surged by 37.17% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- CHIQUITA BRANDS INTL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CHIQUITA BRANDS INTL INC continued to lose money by earning -$0.34 versus -$8.71 in the prior year. This year, the market expects an improvement in earnings ($1.12 versus -$0.34).
- Net operating cash flow has significantly decreased to -$0.26 million or 102.31% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- Currently the debt-to-equity ratio of 1.69 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with the unfavorable debt-to-equity ratio, CQB maintains a poor quick ratio of 0.89, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: CQB Ratings Report