A&B profit falls on slow property sales
Profit is down 34% due to a large drop-off in real estate sales
Alexander & Baldwin Inc. said today its earnings were off 34 percent in the first quarter compared to the year before, when revenue was swollen by the sale of 247 condominium units at its Hokua joint venture in Kakaako.
A&B said its China ocean-shipping service saw a more than fivefold increase over a year ago, helping to offset lower traffic on its Hawaii-mainland service.
Net income was $24.7 million compared with $37.4 million a year earlier. Revenue increased 6.8 percent to $385 million from $360.6 million.
Alexander & Baldwin Inc.
said yesterday first-quarter net income for the company tumbled 34 percent due to a large drop-off in real estate sales from a year earlier, but also noted that its new China ocean-shipping service is already paying off.
The parent of Matson Navigation Co. posted earnings of $24.7 million, or 58 cents a share, compared with $37.4 million, or 84 cents a share, a year earlier. Revenue rose 6.8 percent to $385 million from $360.6 million.
A&B, which missed analysts' earnings estimates by 3 cents, said it had expected to see real estate sales decline after benefiting from the sale of 247 residential condominium units in the year-earlier quarter at its Hokua joint venture in Kakaako.
But double-digit operating profit gains in its real estate leasing and integrated logistics units partially offset that decline.
In the just-concluded quarter, real estate sales fell 73 percent to $6.5 million from $23.8 million, with most of the 2007 revenue coming from a $5.9 million final payment on an installment sale of an agricultural parcel on Kauai. Ope- rating profit for the segment declined 68 percent to $8.8 million from $27.1 million.
Matson's Hawaii service slipped as Hawaii container volume fell 3 percent due to reduced shipments of lower-margin building materials from the Pacific Northwest, and automobile volume decreased 28 percent predominantly due to reduced fleet and retail auto sales.
But overall, Matson's revenue rose 6 percent to $231.6 million and its operating profit -- excluding a $3.3 million gain from two vessels a year earlier -- increased 3 percent to $18.8 million. A&B attributed the operating profit in part to growth in traffic on its China service, which was up more than fivefold from a year earlier when it began service in February.
In A&B's real estate leasing unit, operating profit jumped 24 percent to $15 million while revenue climbed 17 percent to $28.8 million.
The transportation logistics segment saw its operating profit rise 19 percent to $5.6 million, but revenue fell 5 percent to $102.9 million due to the softening of the domestic market and lost volume associated with the departure of a truck brokerage agency following the first quarter of 2006.
A&B's agribusiness produced more than 11 times additional sugar than a year earlier because of the timing of harvesting. That resulted in an 11 percent increase in revenue to $17.2 million. However, operating profit declined 45 percent to $3.6 million due to a decline in raw sugar margins among other things.