Alexander & Baldwin Inc. boosted its net profit last year by 16 percent to $142.2 million, largely on its growing ocean transportation service from China and strong activity in Hawai'i's real-estate market.

The Honolulu-based company also reported good results from its ground-based transportation services concentrated on the Mainland but was disappointed with break-even Hawai'i agricultural operations.

A&B produced its earnings growth on revenue that was up only 5 percent to $1.68 billion from $1.60 billion in the prior year.

The company's net income last year was about $20 million more than the $122.5 million in 2006, which was down slightly from $126 million in 2005.

"(Last year) was a very good year for Alexander & Baldwin," the company said in a statement. "This was accomplished despite an economic environment that became more challenging as the year progressed."

A&B cautioned that this year is likely to be a "choppier" business environment, but that last year's performance puts the company in a strong position to continue earnings growth.

"We do expect 2008 to be a good year," Allen Doane, A&B chairman and CEO, said in a conference call with Wall Street analysts. "Our major operating units are all on solid ground with sound market positions that will serve us well in the coming year."

A&B forecasts 2008 net income per share of stock at $3.40 to $3.60.

Last year the company earned $3.30 per share, compared with $2.81 the year before.

Matson Navigation Co., A&B's ocean transportation subsidiary, contributed the most in revenue and operating profit among business segments.

Matson reported a $126.5 million operating profit on revenue of $1 billion.

The company said its nearly 2-year-old service from China operated at an essentially full capacity, transporting 51,200 containers, which represented a 57 percent increase in volume over 32,700 containers in the prior year.

Matson's Hawai'i service suffered a 3 percent decrease in container volume and a 7 percent decrease in automobile shipments that reflected moderation in the state's economic expansion and reduced retail auto sales and turnover of rental car fleets.

Higher fuel costs also are affecting the company, but to a limited extent because Matson has been able to pass on most of the costs to customers through fuel surcharges.

Matson's logistics subsidiary, which coordinates ground-based transportation, reported a 5 percent rise in operating profit to $21.8 million despite a decrease in business.

In real estate, A&B reported a 26 percent operating profit increase mostly from sale activity that included the land under the Don Quijote retail store in Hono-lulu, two retail centers and several other commercial properties.

Real-estate sales also included 162 residential units at A&B development projects — 86 at Kai Malu on Maui, 50 at Kukui'ula on Kaua'i and 26 at Port Allen on Kaua'i.

A&B's Kaka'ako residential high-rise Keola La'i on O'ahu isn't slated for completion until March, which won't produce sales proceeds for the company until the first or second quarter of this year. A&B said 323, or nearly 92 percent of the building's 352 units, are under binding sales contracts for an average price of $684,000.

All A&B real-estate sales last year produced $74.4 million in operating profit, up 50 percent from 2006.

A&B also reported $51.6 million in operating profit, a 3 percent rise from 2006, from rental income properties that were 97 percent occupied.

Agriculture operations were dragged down by low sugar prices and production offset by better coffee and power generation businesses that helped produce a $200,000 operating profit that was $6.7 million less than a year before.

A&B said it produced 164,500 tons of sugar last year, down 5 percent from 173,600 tons a year earlier. The drop was due in part to draught conditions over the past two years.

Shares of A&B stock closed yesterday up 91 cents at $45.72. That compared with a 52-week low of $42.13 on Jan. 22 and a 52-week high of $58.19 on July 19, 2007.

A&B said it bought back 671,728 shares of its stock last year for $32.6 million, or $48.62 per share on average.

The company also said that since Jan. 1, it bought back another 1.1 million shares for $49.7 million, or $44.24 per share on average.

Yesterday the company said its board authorized the repurchase of up to 2 million shares by the end of 2009, which supplements an existing authorization to repurchase 205,968 shares by the end of this year.

"These repurchases are a very good investment for the company and an important means of returning cash to our shareholders," Doane said.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.