Horizon Lines Inc. said its profits rose sharply in the third quarter despite declining revenue from its Hawai'i shipping operations.

The North Carolina-based company said it earned $12.5 million, or 42 cents per share in the third quarter, up from$1.6 million, or 5 cents per share in the same period a year earlier. Revenue rose to $352.6 million in the third quarter from $321.1 million a year earlier.

"Our company performed well in the face of increased challenges during the third-quarter," said Chuck Raymond, chairman, president and chief executive officer. "Volumes were negatively impacted by continued weakness in our Puerto Rico market, which was exacerbated by five tropical storms including three hurricanes, and by a sharper-than-anticipated slowdown in Hawaii, where a steep drop in tourism pressured the economy."

Raymond said the company expects Hawaii's economy to "soften further in the fourth quarter, as visitor volumes from the U.S. and Japan continue to contract sharply."