BANANA GLUT LACKS APPEAL; SITUATION FORCES DOLE TO LOWER EXPECTATIONS.

Byline: Gregory J. Wilcox Daily News Staff Writer

Faced with an oversupply of bananas in Europe, Dole Food Company Inc. said Thursday that its second-quarter earnings would be substantially below previous estimates.

The company - an international retailer of fruits, vegetables and flowers - expects earnings from continuing operations to be in the 55- to 75-cent-per-share range for the quarter.

Previously, a survey of four analysts by First Call Inc. pegged Dole's earnings at 99 cents a share.

Dole treasurer Beth Potillo said an increased supply of bananas and continued soft demand from Eastern Europe and Russia led to generally lower prices across the continent.

The European Union sets a fixed amount of bananas that can be imported during the year. In the second quarter, it allowed 36 percent of that total, vs. 27 percent in the 1998 second quarter, she said.

That percentage could be lower on an annual basis during the balance of the year but there is no way to predict the impact on prices, she said.

Dole also said earnings in its other core businesses were in line with previous estimates. And the company said insurance proceeds from Hurricane Mitch should contribute between 10 cents and 15 cents per share to earnings for the quarter.

Chuck Hill, research director at First Call, said some analysts already are revising their second-quarter estimates for Dole, which will report sometime in July.

``In any case they already did not like this stock,'' he said, noting that the consensus of four analysts was a hold on Dole.

During the March first quarter, Dole reported net income of $37.1 million, or 65 cents per share, on sales of $1.19 billion. That compares with income of $22.76 million, or 37 cents, in the 1998 first quarter.

Timothy S. Ramey, an analyst at Deutsche Bank Securities Inc. now pegs Dole's second earnings at 75 cents a share, the upper end of the company's estimate.

``I guess that's the high end of the range but I think we'll leave it there for the time being,'' he said. ``It's a cheap stock but they seem to be somewhat accident prone. They have not had anything positive to announce in the marketplace for well over a year now.''

Dole's stock closed Thursday at $31.75, up 62.5 cents, a gain of 2.01 percent, on volume of 429,000 shares, about double its 30-day average.

Based in Westlake Village, Dole is the world's largest producer and marketer of fresh fruit and vegetables, and markets a growing line of packaged foods and fresh flowers.

Dole is the second big banana producer to announce a hit on earnings from market problems in Europe. On Wednesday, Chiquita Brands International Inc. said it too would take a substantial balance sheet hit during the quarter.

Chiquita did not provide a range but said second-quarter earnings would be well below the 66 cents per share of the year-ago period.

In a news release it blamed the decline on a ``disproportionately large second quarter allocation of the annual supply of banana import licenses as compared to licenses issued in any prior second quarter since inception of the (European Union) banana quota regime.''