Slowly recovering from a run of natural and political catastrophes,

Dole Food

(DOL) - Get Report

said Friday that it had returned to fourth-quarter profitability.

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The Westlake Village, Calif.-based fruit and vegetable producer slightly exceeded Wall Street's expectations, and its share price gained 15/16, or 7%, to 15. (It closed up 1, or 7.1%, at 15 1/16.)

For the fourth quarter ended Dec. 31, the company reported earnings of $2.1 million, or 4 cents a diluted share, excluding one-time items. In the comparable quarter last year, the company lost $7.8 million, or 13 cents a share. Analysts polled by

First Call/Thomson Financial

had predicted an average of 3 cents a diluted share in the most recent quarter.

Revenues edged up to $1.1 billion in the latest quarter from $1 billion a year earlier.

The company, which last month

hired

Goldman Sachs

to explore alternatives including a sale of its business, excluded from its earnings most of the factors that have frightened its investors.

The company received $9.2 million in insurance proceeds during the quarter due to losses it suffered when Hurricane Mitch devastated its Latin American producers in late October 1998. The hurricane and a California crop freeze forced the company to take $120 million in charges in 1998.

"Last year was horrendously bad," said Terry Bivens, analyst for

Bear Stearns

. "Everyone expected them to make some money this year. The whole story depends on how banana pricing improves next year."

Bivens rates the stock a hold; his firm has not done underwriting for Dole.

Moody's Investors Service

downgraded the company's debt ratings on Jan 20, citing weak debt-protection measures, weak pricing and share repurchases. The company's debt has increased to $506 million since 1997, the firm noted.

Interest expense in the current quarter was $21.8 million, compared to $18.3 million in the comparable quarter last year.

The company attributed its increase in net income to improved earnings in fresh fruit and processed foods, particularly in North America. Though Dole has a varied business, including canned and fresh fruits and vegetables as well as flowers, its stock price closely follows the fortunes of the banana industry

On the West Coast, a 40-pound barrel of bananas sells for $15, 32% more than the $11.70 price this week last year, while East Coast prices are up to $12.50, a 6.4% increase from $11.75 a year ago, according to the U.S. Department of Agriculture.

In Europe, banana prices are up in local currencies, but the dollar's strength overshadows the gain, said Nomi Ghez, analyst for Goldman Sachs. (Ghez rates the stock a hold, and Dole hired her firm to explore "strategic alternatives")

Ghez said quota changes and import licensing decisions by the

European Union

would not meaningfully affect the company's earnings. Bivens, however, said E.U. actions designed to embarrass the

Clinton

administration carry the potential to damage American food companies.

Beth Potillo, the company's treasurer, said nothing has changed in Dole's restructuring efforts.