Real estate catapults A&B’s net 76 percent
Alexander & Baldwin Inc., parent of shipper Matson Navigation Co., said today its earnings jumped 76 percent in the third quarter on strength in its real estate unit.
Net income increased to $49.1 million, or $1.14 a share, from $27.9 million, or 65 cents a share, a year earlier. A&B exceeded analysts' average earnings estimate by 13 cents a share, according to a poll of four analysts by Thomson Financial.
Including discontinued operations, real estate revenue soared to $78.5 million from $5 million in the quarter on the sale of a four-acre Honolulu property and two Maui retail centers from its income portfolio.
"We expect to use the $72 million of proceeds from these transactions to acquire additional commercial properties," Allen Doane, chairman and CEO, said in a statement.
A&B also closed on the sale of single-family residential development on Kauai.
In A&B's real estate leasing unit, operating profit fell 2 percent to $12.2 million while revenue climbed 3 percent to $26.3 million.
Overall revenue for the three months ending Sept. 30 was $434.7 million, up 3.2 percent from $421.2 million in 2006.
A 23 percent increase in China service container volume in the quarter pushed Matson's revenue up 7 percent to $259.9 million from $243.2 million a year earlier, helping offset a 4 percent decrease in Hawaii container volume in the quarter.
Transportation logistics revenue fell 2 percent to $110.4 million from $113.1 million in the quarter, on lower volume in international rail cargo. Operating profit increased 18 percent to $6 million, but the company said it expects earnings to be "challenged somewhat" in the fourth quarter as a result of the changing industry environment.
A&B's agribusiness segment produced 15 percent less sugar than a year earlier after facing extraordinarily dry weather conditions. Lower sugar sales resulted in an 11 percent decrease in revenue to $37.3 million from $41.8 million in the quarter for the unit, forcing the company to lower its annual production forecast.
The company also said today it will buy a seven-building industrial complex next to the Dallas-Fort Worth International Airport in Texas.
The $102 million acquisition of the Heritage Business Park is expected to close next month, adding 1.3 million square feet of leasable space to the company's portfolio.