A&B anticipates earnings decline
Staff and News Services
Honolulu-based Alexander & Baldwin Inc. warned investors yesterday that its second-quarter profit may fall 10 percent to 15 percent below last year's 69 cents a share because of a tighter shipping market and fewer property sales.
The company emphasized, however, that it has put in place cost-saving measures aimed at improving corporate performance for the year.
The company issued a statement cautioning that minimal demand in freight growth and a competitive pricing battle with rival CSX Lines has meant lower year-on-year results this year for its Matson Navigation Co.
Matson saw a 12 percent drop in operating profits during the first quarter this year. John Kelley, A&B vice president of corporate planning, said second-quarter results likely will be off as well.
To counter that, he said, Matson has taken steps to reduce overhead, increase terminal productivity and close out-of-date freight stations serving customers shipping less than a container-load of goods.
Moreover, Matson officials are scrutinizing every discretionary expenditure. "It's a case of honing your operation," Kelley said.
A&B said its A&B Properties has not made the same large property sales this quarter as last year — or in the first quarter, when sales accounted for $12.2 million in operating income.
However, A&B said it did receive $16.2 million, for an after-tax gain of about $9.4 million, from sales in April and May of its remaining 749,000 shares of Pacific Century Financial Corp., parent of Bank of Hawaii.
Additionally, the company said it can expect an after-tax gain of about $68 million later this year if BNP Paribas SA receives regulatory approval to purchase the remaining 55 percent of stock of BancWest Corp., parent company of First Hawaiian Bank.
The company noted, for example, that first-half earnings this year should be ahead of the $1.03 a share earned in the first six months of 2000.
In addition to Matson and A&B Properties, A&B operates Hawaiian Commercial & Sugar Co. and Kaua'i Coffee Co.
Alexander & Baldwin shares, which fell 15 cents to $24.10 yesterday, are down 8.2 percent this year. The company's earnings announcement came after the close of trading.
