Castle & Cooke net
dives; plans layoffs

Weak home sales
on Oahu plague company

By Rob Perez
Star-Bulletin

Blaming Hawaii's sluggish economy, Castle & Cooke Inc. today reported a 77 percent drop in third-quarter earnings and said it plans layoffs at its Oahu operations.

The real estate developer posted a $479,000 gain on revenue of $54.5 million for the quarter ended Sept. 30, compared with a $2.1 million profit on revenue of $58.9 million a year earlier.

On a per share basis, the earnings amounted to a loss of 3 cents a share after preferred dividends were paid, compared with a 5-cent per share gain in the 1996 quarter.

"The Oahu economy has had a negative impact on our residential operations over the past three years," David Murdock, company chairman and chief executive, said in a statement.

He noted that new home orders on Oahu are down 24 percent through the first nine months of the year.

Because of the decreased activity, he said, the company continues to cut costs. By year's end, Murdock said, he expects the Oahu staff to be 35 percent below peak 1995 levels, due to attrition, layoffs and transferring of some functions to contractors.

Edward Roohan, Caste & Cooke's vice president and chief financial officer, said some employees already have been laid off and others will lose their jobs by year's end.

He declined to provide layoff numbers or say how many people Los Angeles-based Castle & Cooke employs on Oahu.

"We're trying to do the right thing for our company and our shareholders," Roohan said.

The company's two Lanai resorts continue to lose money but at a slower pace because of increased occupancy and room rates, Murdock said. The resort operations -- excluding its luxury home sales there -- posted an operating loss of $2.4 million, compared with a $3.6 million loss a year earlier.

The company reported 95 homes and 100 lots were sold in the third quarter, compared with 112 homes and 70 lots a year earlier. Average home sales price was up 5 percent to $258,000.

New home orders were off nearly 6 percent to 131.

For the first nine months, the company earned $2.3 million, down 71 percent from the year-earlier period. Revenue declined 24 percent to $163.7 million.

Craig Silvers, an analyst with Sutro & Co. in Los Angeles, said the numbers weren't surprising.

"It's the Hawaii economy hurting Castle & Cooke," Silvers said. "Until the economy picks up, the earnings are going to be very lackluster."