What happened

Shares of Dole (DOLE 0.27%), which grows and sells fruits and vegetables, fell sharply at the open of trading on Tuesday, losing as much as 12% of their value in the first few minutes of trading. The drop was precipitated by the company's first-quarter 2022 earnings release. The results were a bit mixed, but investors clearly didn't like what they read very much.

So what

Revenue came in at $2.245 billion in the first quarter of 2022, down slightly from a pro forma $2.266 billion in the same period of the prior year. The pro forma here is because Dole completed its initial public offering in July of 2021, a move that included a merger with another produce company, so there really aren't "official" figures for the first quarter of 2021.

That said, the top-line drop was partly driven by a packaged-salad recall that led to a 16.2% revenue decline in the company's fresh vegetables division. Dole missed Wall Street's revenue expectations.

An employee in a grocery store holding fruit in the produce department.

Image source: Getty Images.

On the bottom line, adjusted first-quarter earnings came in at $0.30 per share, down from the pro forma $0.62 it posted in the same quarter of 2021. That said, analysts had been expecting $0.27 per share, so the company actually beat the Wall Street consensus. Normally that would be viewed positively, but given the generally negative sentiment at the open of trading today and the company's revised outlook (more on this below), investors were in a selling mood here.

Now what

One of the highlights from the earnings report was the impact of inflation on the company, as it faced higher costs across key business lines. That, in turn, led Dole to lower its target for full-year 2022 adjusted earnings before interest, taxes, deprecation, and amortization (EBITDA) from a range of $370 million to $380 million to a range of $350 million to $370 million.

Revenue estimates also came down, likely a result of the above-mentioned recall as well as broader geopolitical tensions that could impact the company's performance. In the end, beating earnings expectations wasn't enough to offset a reduction in the company's full-year guidance today.