Shares of Fresh Del Monte Produce Inc. (FDP) plummeted 7.76% in pre-market trading on Monday, as the company reported weaker-than-expected fourth-quarter 2024 earnings, dragged down by its struggling banana business and high production costs.

The fresh produce company reported adjusted earnings per share of $0.26 for the quarter, missing analysts' estimates of $0.37 by a wide margin. Revenue of $1.01 billion also narrowly missed forecasts of $1.03 billion.

The disappointing results were primarily attributed to challenges in FDP's banana segment, which has now seen six consecutive quarters of sales declines. In Q4, banana sales fell 6% year-over-year, driven by lower sales volumes in North America amid competitive pressures. For the full fiscal year 2024, banana segment sales were down roughly 1%, impacted by lower volumes, prices, and the negative impact of foreign exchange fluctuations.

Furthermore, higher production and procurement costs in the banana business led to a significant decline in gross profit and margins for the segment. FDP cited broader inflationary pressures, including higher distribution, logistics, and ocean freight expenses, as well as unfavorable currency movements versus the Japanese yen and Korean won.

However, FDP's fresh and value-added products segment, comprising pineapples, avocados, and fresh-cut fruit, demonstrated strong growth and profitability. This segment helped partially offset the impact of the banana segment's underperformance, but was not enough to prevent the overall earnings miss.