Chiquita Brands International (NYSE:CQB) announced a broad restructuring plan that involves the elimination of 160 managment positions and business model alterations designed to accelerate its previously announced strategy to improve profitability and efficiency. Shareholders are hoping that these moves can help pump life into a stock that has traded sideways for a year.

"While we have already taken various actions to strengthen our balance sheet, improve our risk profile and diversify the company, we continue to endure rising industry costs, punitive European banana import regulations, and a slower-than-expected recovery in the value-added salads category," Chief Executive Fernando Aguirre said in a statement.

The distributor and marketer of bananas and farm products said it expects annual cost savings to come through reductions in the company's operating and corporate overhead structure including elimination of management positions and business model changes by planned exit from non-profitable businesses. This is expected to yield sustainable savings of $60 to $80 million anually after a one-time charge of $25 million in the fourth quarter.

"With these changes, however, we will need to redefine our growth targets, since the negative impacts of rising industry costs, the EU tariff regime and the E. coli event have slowed down our strategic growth plan considerably, such that reaching our goals will take us longer than we originally estimated," Aguirre said.

In the end, this is great news for shareholders as any cost savings are a direct boost to the company's bottom line. However, cost cutting can only boost margins so much - unless the company's sales start improving, there may be more trouble on the horizon Combined, these factors make CQB a stock worth watching!

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