It's time for this observer to eat crow -- feathers and all. In a duel in 2004, I was singing the praises of Fresh Del Monte Produce (NYSE:FDP). Now it's time to look at an unexpectedly bad fourth quarter and see whether the stock is a buy -- it's down 9.4% at noon and near its 52-week low.

There's no doubt the fourth quarter was way off the mark that Wall Street analysts had set for it. Sales in the year-ago fourth quarter were $818.2 million, and the lowest revenue estimate among the four analysts offering projections was $831.1 million. Instead of that modest growth, the company reported a decline to $757.9 million. That's a big miss.

After the company's poor third quarter, analysts weren't expecting anything like the $0.33 the company earned in last year's fourth quarter. But they did expect the company to eke out at least a one-cent profit. Even after excluding restructuring and asset impairment charges, the company lost two pennies a share.

Why cry over such a small loss? Look back over the past two years, and you'll see that the company's return on invested capital has more recently dropped to the mid-single digits, after a stretch in the mid-teens before that. And at recent thresholds, the company's ongoing operations have been more or less destroying shareholder value, from an economic standpoint. This most recent loss is just a more obvious sign that something is really wrong.

What didn't pan out?
One thing I did get right in 2004 was that holding a commanding 50% market share in pineapples would be hard, given building competition in the Gold Extra Sweet pineapple category the company had dominated. The company is labeling the latest quarter's pineapple sales "lower than expected."

Del Monte didn't break out sales by segment, but pineapple results were bad enough for the company to decide to close its Hawaiian operations by mid-2008. That's a curious move, considering that Maui Land & Pineapple's (AMEX:MLP) latest quarter saw only a 1% drop in its agricultural revenue -- although it's in the process of restructuring its Hawaiian operations.

Is the stock a buy?
No! Although debt is a modest 27.2% of equity, the company's return on invested capital is troubling -- as is the $0.80 dividend, which is a $46.4 million annual expense. While General Motors may think it makes sense to pay a dividend while losing gobs of money, it's my opinion that Fresh Del Monte needs to pay down its debt, invest in its operations, and focus on its operating profitability.

The rumor that Motley Fool Income Investor pick JPMorgan Chase has been hired to auction the company has been holding the stock up recently. During today's conference call, it was revealed that a bid had been received but was rejected by the board. Today, poor results would probably be a bigger weight on the stock if it weren't for this openness to selling the company. But why invest in a company that's performing poorly and is unwilling to share its business outlook for the coming fiscal year?

Still, given recent results and the relatively dismal outlook, I can't help thinking Fresh Del Monte Produce is simply overpriced (compared with peers like Chiquita), based on its current operating results.

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Fool contributor W.D. Crotty owns shares in Chiquita but wishes that Maui were on the agenda for today. Click here to see The Motley Fool's disclosure policy.