Food Maker Chews on Wrong Kind of Salad Days

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When salmonella concerns forced Dole Food Co. to recall some bagged salads early last week, investors continued tossing the stock in the days that followed.

The Westlake Village company was one of the biggest losers on the LABJ Stock Index last week, falling more than 6 percent to $9.02 on April 18. (See page 32).

Last week’s stock slide was only the latest downturn for Dole; shares were down 32 percent from one year earlier. The yearlong decline was attributed to a bad banana crop in Latin America, where Dole has farming operations.

Nonetheless, Gary Albanese, a senior equity analyst at New York’s Auriga USA, said the recall wasn’t a significant factor given the company’s size.

“It was a relatively small number of cases, which is a minimal effect on the company,” Albanese said.

He recommends buying the stock he calls “still relatively attractive.” The company’s brand and improving conditions in the banana market give him confidence in the company.

“Fresh fruit is a cyclical business; last year it was a very volatile banana market,” he said. “Much of the bananas are sourced from Latin America, which had a weak crop early last year that drove costs higher.”

In March, Dole reported net income of $4 million for its fourth quarter, compared with a loss of $36 million a year earlier. Revenue fell 1 percent to $1.54 billion.

The 161-year-old company operates in 90 countries, and employs 36,000 full-time and 23,000 seasonal workers.

The company’s latest problem hit when 756 cases of bagged salads were recalled April 14 after a random sample tested positive for salmonella.

The recalled bags were distributed in 15 states across the United States, mostly east of the Mississippi River. No other Dole salads were included in the salmonella recall.

Symptoms of salmonella poisoning include fever, nausea, diarrhea, vomiting or abdominal pain, and can be fatal to children, the elderly and pregnant women. Dole said the recall was a precautionary measure. No cases of illness have been reported.

Marty Ordman, Dole’s vice president of marketing and communications, called the recall an isolated occurrence.

“The salad was processed at our Bessemer City, Ala., facility and the lettuces were from Florida,” Ordman said in an e-mail. “We are still investigating the growers. We have a highly sophisticated computerized tracking system from the code on the bag, to the processing line to the raw materials.”

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