Despite a sales decline, Calavo Growers Inc. on Tuesday reported sharply higher first-quarter earnings due to improved gross margins.

The Santa Paula marketer and distributor of avocados and other produce reported net earnings of $4.4 million (30 cents per share), compared with earnings of $732,000 (5 cents) a year ago. Sales declined 2 percent to $70.6 million.

The gross margin was $12.5 million, or almost 18 percent of revenues, compared with $6 million (8.3 percent) in the same period last year. The company attributed its higher margins to improved operating efficiencies. The company's processed products segment in particular recorded substantially higher profits.

"Historically, our first fiscal quarter is usually our smallest on a seasonal basis," said Chief Executive Lee E. Cole in a statement. "The development of our global sourcing strategy is altering this model, allowing us to profit from Calavo's infrastructure on a more consistent basis. In addition, unit volumes of all our fresh products avocados, tomatoes, pineapples, papayas and mushrooms continued to grow."

Calavo's shares were up 32 cents, or 3 percent, to $10.83 in morning trading on the Nasdaq.

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