Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Dole Food is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Dole is a household name in fresh and canned fruit. But the food industry has been a tough place to make money recently, largely because of high costs. Let's take an early look at what's been happening with Dole Food over the past quarter and what we're likely to see in its quarterly report on Tuesday.
Stats on Dole Food
Analyst EPS Estimate
Change From Year-Ago Revenue
Earnings Beats in Past 4 Quarters
Source: Yahoo! Finance.
Will Dole Food feed investors well this quarter?
Analysts have gotten a lot less optimistic about Dole's prospects over the past few months. For the just ended-quarter, estimates have gotten cut all the way from an expected $0.11-per-share profit to the current loss call, and analysts have lopped $0.37 per share off their full-year 2013 expectations. The stock has barely budged, though, losing just half a percent since early December.
We've already gotten a hint that Dole's report won't be as good as investors had hoped coming into the quarter, because the company updated its guidance back in January in light of its decision to sell its packaged foods and Asian fresh fruit business to Japan's Itochu for $1.7 billion back in September. Dole announced that earnings for the full 2013 year would come in between $45 million and $60 million, well below expectations, sending shares plunging. It also cited challenges in the banana market, where rival Chiquita Brands has offered value pricing to gain a market-share advantage.
The Itochu deal, though, could turn things around for Dole. With Itochu paying cash, Dole should be able to eliminate most of its heavy debt overhang while re-emphasizing its traditional focus on fruit in North American and Europe. Competition from Chiquita and Fresh Del Monte will continue to pressure Dole's margins, but by refocusing its efforts, Dole will be in a better position to concentrate on its business rather than dealing with the strain of capital-financing issues.
In Dole's quarterly report, expect to hear that the Itochu deal is still on schedule to close in April, along with details on the company's strategy once the deal closes. With a whole new debt-free lease on life, Dole could look like a completely different company in the near future.
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
Click here to add Dole Food to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.
The article Dole Food Earnings: An Early Look originally appeared on Fool.com.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.