A&B earnings jump 43 percent

Boosted by strong performance in its real estate and Matson Navigation ocean shipping units, Alexander & Baldwin Inc. of Honolulu reported a 43 percent increase in earnings in the third quarter.

A&B's net income for the quarter rose to $35.5 million, or 81 cents a share, from $24.8 million or 58 cents a share, during the same quarter a year ago, the company said yesterday. Revenue increased 18.5 percent to $451.8 million for the quarter from $381.2 million last year.

Ocean transportation operations produced $36.8 million in operating profit on $227.5 million in revenue; that was 12 percent higher operating profit than the same quarter in 2004. A&B attributed this primarily to good performance at SSA Terminals LLC, a stevedoring and terminal operating company in which Matson is a minority partner.

Real estate sales, meanwhile, produced $15.6 million in operating profit on $61.7 million in revenue for the quarter. This was more than six times the $2.5 million in operating profit produced during the same quarter last year. A&B said it sold all 100 units of its Lanikea high-rise in Waikiki for $59 million and a Maui property for $2.5 million.

"It's almost exactly what an analyst wants to see," said Jamelah Leddy, an analyst with McAdams Wright Ragen in Seattle. "From a margin perspective, they were slightly better than my expectations on every line item."

Allen Doane, A&B's president and chief executive, said, "With this quarter's contribution, the company is on track for an outstanding 2005."

At the same time, Doane warned investors of potentially tough times next year. With a new cargo service adding China to Matson's shipping service to Guam, Hawaii and the mainland next year, Matson has warned its earnings likely will suffer partly because of start-up spending and increased energy costs.

"Matson has been enjoying what might be characterized as 'smooth seas,' but we are mindful of the recent sharp hikes in energy costs and the widespread effects they will have on operating costs," Doane said yesterday.

Leddy said she believes A&B simply doesn't want investors to become overly exuberant about the company. But Leddy said exuberance is hard to avoid with a quarter like A&B's last one. So good was the quarter that Leddy struggled to pick out a single highlight.

"Everything -- it was just a good quarter," she said.