Castle & Cooke’s
net sinks

Slow Oahu home sales
and bad weather on Lanai cut
first-quarter earnings by 81%

By Russ Lynch
Star-Bulletin

Slow home sales on Oahu cut Castle & Cooke Inc.'s first-quarter earnings 81 percent, the company said today.

Home prices also were to blame, as builders cut prices to sell the homes they had in inventory, Castle & Cooke said.

The company reported a net profit of $518,000 for the quarter March 31, less than one-fifth of the profit of $2.7 million reported for the year-earlier period.

After a payout of just over $1 million in dividends on preferred stock, about the same as last year, the net result to common shareholders was a loss of $532,000, or 3 cents a share, in the latest quarter, compared with a profit of $1.6 million, or 8 cents a share, in the 1996 quarter.

The company sold 73 homes in the first quarter compared with 141 in the 1996 quarter, but sales of residential lots increased to 208 from 167 a year earlier. The average home price in the latest quarter was $260,000, down 7 percent from $279,000 in the year-earlier period.

Castle & Cooke said it ended the first quarter with 83 new homes on order compared with 201 a year earlier and a backlog worth $18.7 million compared with a $48.6 million backlog at the same time last year.

Resort operations on Lanai were hurt by adverse weather in January that limited access to the island, said David H. Murdock, chairman and chief executive officer.

Lanai operations also were affected by a decision to try to shift bookings of large groups from winter to the summer months, when occupancy rates are traditionally lower, Murdock said.

Based in Los Angeles, Castle & Cooke has home-building operations in Hawaii, California and Arizona, commercial property operations in Hawaii and four other states, and the resort operations on Lanai.