Avocado producer Calavo beats earnings estimates but says strong supply kept prices down

Avocado producer Calavo Growers Inc. shares CVGW, -3.56% dipped 0.7% in early trade Wednesday, after the company beat profit estimates for its fiscal third quarter, but said a large supply of avocados kept prices down. The company said it had net income of $12.4 million, or 70 cents a share, in the quarter, up from $8.8 million, or 50 cents a share, in the year-earlier period. Adjusted per-share earnings came to 86 cents, ahead of the 78 cents FactSet consensus. Revenue fell 2% to $296.4 million, compared with a FactSet consensus of $296.0 million. Volume of avocado units sold rose 18% from a year ago. "While consumption tracked significantly higher, the larger available fruit supply industry-wide resulted in lower year-over-year fresh avocado market pricing which had the effect of constraining Calavo’s sales growth in the most-recent quarter," Chief Executive Lee Cole said in a release. Cole said he is "highly confident and enthusiastic about Calavo’s prospects moving forward," as the avocado industry is continuing to grow. The company is expecting full-year sales to grow in the high teens. Shares have gained 21% in 2018, while the S&P 500 SPX, -0.45% has gained 8%.

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