Castle & Cooke
net up $4 mil

The sale of 2 undeveloped
land parcels boosted profits
for the quarter

By Russ Lynch
Star-Bulletin

Despite a slowdown in residential home sales on Oahu, Castle & Cooke Inc. boosted its third-quarter profit to $4 million, from only $476,000 in the year-earlier quarter.

The result equals a profit of 24 cents a share in the latest quarter, while the 1997 third-quarter result turned into a loss of 3 cents a share after dividends were paid on preferred stock. The company has since redeemed all its preferred stock.

Revenues for the latest quarter were $79.1 million, up 45 percent from $54.5 million in the year-earlier quarter, the company said today.

The net profit on the 1998 quarter was boosted by the sale of two large undeveloped land parcels on the mainland, which generated net income of $2.2 million.

Los Angeles-based Castle & Cooke develops and sells residential properties on Oahu, owns and manages resorts and property on Lanai, and sells homes and home sites on the mainland. The company said new orders for homes on Oahu were down 30 percent for the quarter, compared with the same period last year.

"The Asian economic crisis continues to negatively impact our Oahu residential business and the overall Hawaii economy," David H. Murdock, chairman and chief executive officer.

On Oahu, the company started the third quarter with orders for 94 homes, gained new orders for 90 more and delivered 103 homes, leaving it with a backlog at the end of the quarter of 81 homes sold but not yet completed and turned over to the buyers.

In the year-earlier quarter, Castle & Cooke started with a backlog of 80 homes on Oahu, sold 129 more and delivered 91, leaving it with backlog of 118. The backlog at the end of the latest quarter was 33 percent below the year-earlier level.

Oahu homes delivered in the latest quarter had an average price of $270,000, up 2.3 percent from an average of $264,000 in the 1997 quarter.

On the mainland -- where the company has residential operations in California, Arizona and Florida -- Castle & Cooke started with a backlog of three units on order, sold 15 more and delivered seven, leaving it with a backlog of 11. In the year-earlier quarter, mainland operations started with a backlog of two units, sold two more and delivered four, leaving it with no backlog.

The average price of the homes delivered on the mainland was $129,000 in the latest quarter, up 19.4 percent from $108,000 in the 1998 quarter.

Castle & Cooke said it maintained nearly the same level of operating loss from its Lanai resorts, $5.3 million in the latest quarter vs. $5.6 million in year-earlier period, but has signed sales contracts for five townhouses in the Terraces at Manele Bay for a total of $6.1 million.