Local real estate, ocean transportation and agriculture company Alexander & Baldwin Inc. posted a $12.6 million profit in the second quarter, a 57 percent drop from from $29.6 million in the same quarter last year.

Economy-driven declines in shipping and real estate leasing as well as slow real estate sales and lower sugar production weighed heavily on the Honolulu-based firm's finances. But the earnings were an improvement over the $3 million profit eked out in the first quarter, when subsidiary Matson Navigation Co. lost money.

In the second quarter, Matson returned to profitability, in large part from expense reductions associated with taking a ship out of service and employee cutbacks. Matson's financial turnaround was the principal reason for A&B's second-quarter profit being higher than the first quarter.

Though second-quarter earnings were not favorable compared with last year's second quarter, shares of A&B stock rose 19 cents yesterday to close at $29.13, up from a 52-week low of $16.21 reached on March 9.

W. Allen Doane, A&B's chairman and chief executive officer, said financial results for the rest of this year are expected to be "choppy."

"In response to the difficult economic environment, we have taken necessary measures this year to better align our cost structure with the realities of today's lower levels of demand," Doane said in a statement.

"These efforts are producing tangible results. The company remains on solid financial ground."

A&B reported second-quarter revenue of $355.1 million, down from $460.5 million in the same quarter last year.

At Matson, Hawai'i container volume was down 12 percent in the quarter from a year earlier, and volume from China, where the company added a new port stop in May, was down 13 percent. Hawai'i automobile shipment volume was up 15 percent, but that was primarily due to the timing of rental fleet replacements.

Matson's operating profit was $21.1 million in the second quarter, down 44 percent from $37.4 million a year earlier. Revenue was $218.5 million, down 19 percent from $268.4 million.

In real estate, A&B's operating profit from leasing activity was $11 million in the second quarter, down 13 percent from $12.6 million a year earlier.

Occupancy at A&B's Hawai'i commercial properties was a strong 95 percent, but down from 99 percent in the 2008 second quarter. Occupancy at Mainland properties was 84 percent, down from 96 percent.

A&B improved operating profit from real estate sales by 5 percent in the second quarter to $9.6 million compared with $9.1 million a year earlier. Sales included Hawaii Business Park, three units at the Kaka'ako residential condominium Keola La'i, one unit at the Keala'ula subdivision on Kaua'i and several leased fee and non-core land parcels on Maui.

Agriculture operations continued to perform badly for A&B, as unprecedented drought conditions over the past two years affected sugarcane production on Maui.

A&B's agriculture division, which also includes Kaua'i Coffee Co., posted an operating loss of $11.3 million in the second quarter, compared with a loss of $4.9 million a year earlier.

Sugar production fell 14 percent, from 50,100 tons to 43,300 tons. The company said the heavy losses have forced a comprehensive evaluation of its sugar operations that is expected to be completed by the end of the year.

Doane said losses in the second half of the year are also expected to be significant for the agricultural division.