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Real-estate sales hurt A&B during third quarter | The Honolulu Advertiser | Hawaii's Newspaper
Posted on: Saturday, October 28, 2006

Real-estate sales hurt A&B during third quarter

Advertiser Staff

Fewer real-estate sales hurt Alexander & Baldwin Inc. third-quarter profit, which declined 21 percent to about $28 million from the same period last year. A&B's Matson Navigation Co. subsidiary had a small decrease in operating profit, while agriculture operations were positive.

THE NUMBERS

Revenue: $422.9 million, down 6 percent from $450.8 million

Net earnings: $27.9 million, down 21 percent from $35.5 million

Earnings per diluted share: 65 cents, down from 81 cents

Ocean transportation operating profit: $34.2 million, down 7 percent from $36.8 million

Real-estate operating profit: $13.7 million, down 49 percent from $27 million

REASONS

  • Real-estate leasing improved, but A&B sold just a few commercial properties. A year earlier, the company completed sales of many Waikiki condominium units and received a fire-related insurance payment that enhanced earnings.

  • Matson's Hawai'i container volume was down 2 percent from a year earlier. Automobile volume was down 15 percent, primarily from reduced manufacturer incentives for rental-car fleet sales, and competition.

    WHAT THEY ARE SAYING

    "While the Hawai'i economy remains healthy, the growth rate has moderated, which ... may continue to impact shipping volumes. Similarly ... indicators point to a more challenging residential market. Despite these factors, 2006 earnings will be quite good."

    Allen Doane
    A&B CEO

    WHAT'S NEXT

  • Several residential projects in development should produce significant sales in the fourth quarter and allow A&B to meet or exceed its full-year projection of 13 percent to 15 percent growth for its real-estate division profitability.

  • Matson expects to benefit from improved efficiency after completing a $500 million, four-year fleet-modernization program. The company added four fuel-efficient ships and lowered its average fleet age to 14 years.
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