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The Honolulu Advertiser

Posted on: Friday, July 25, 2003

A&B profits better than expected in 2nd quarter

By Sean Hao
Advertiser Staff Writer

A&B 2nd Quarter

• Revenues:
$314.7 million, up about 13 percent

• Net income: $23.2 million, or 56 cents a share, up nearly 76 percent
Honolulu-based Alexander & Baldwin yesterday posted better-than-expected second-quarter profits on stronger results in all major businesses.

However, the shipper, property manager and sugarcane grower warned that continued year-over-year growth will be challenging.

During the three-months ended June 30, A&B revenues grew nearly 13 percent to $314.7 million, helped by ocean transportation rate changes and increased auto shipments at the company's Matson operation.

Profits improved nearly 76 percent to $23.2 million, or 56 cents a share, versus a profit of $13.2 million, or 32 cents a share, in the year-ago period.

The results topped the estimate of 45 cents a share made by one analyst surveyed by Nelson Information. The company's results typically are subject to quarterly swings based on the timing of real-estate transactions.

"The second quarter reflected solid, improved performance by all of our businesses," said Allen Doane, A&B president and chief executive. "That is significant as it follows results over the past two years that were uneven and driven largely by external events."

A year ago, A&B was still feeling the lingering effects of the Sept. 11, 2001 terrorist attacks.

The company acknowledged that year-to-year comparisons for the remainder of 2003 may not be as favorable because business during the third quarter of last year had rebounded.

Through the first six months of the year, A&B revenues rose about 14 percent to $588.1 million. Profits improved to $40.8 million, or 99 cents a share, compared with $23 million, or 56 cents a share, through the first half of 2002.

Here's how business fared at A&B's various operations during the first half of this year:

• For the San Francisco-based Matson Navigation Co., ocean transportation business revenues rose 16 percent to $385.4 million and operating profit more than doubled to $35.3 million. Results also benefitted from auto shipments that were delayed into this year by a labor dispute at California docks in the fourth quarter.

• In the property management and development business, which is based in Honolulu, lease revenues rose 13 percent and sales revenues fell 20 percent, including revenues from properties up for sale.

• The Kahului, Maui-based food products operation experienced a 13 percent rise in revenues on higher production and sales of raw sugar and higher raw sugar prices. Going forward, the company said the outlook for this business remains lower for the year in part because of unusually strong year-ago results.

Shares of A&B closed unchanged at $27.44 on the Nasdaq National Market yesterday.

Reach Sean Hao at shao@honoluluadvertiser.com or 525-8093.