HEI net falls
22.3% as utility
A $2 million charge from theBy Russ Lynch
company's ocean-freight units
also weighs on earnings
A sharp drop in profit from its utility subsidiaries helped drag down third-quarter profit at Hawaiian Electric Industries Inc. by 22.3 percent.
A $2 million after-tax loss on the pending sale of HEI's ocean freight businesses also helped reduce quarterly earnings compared with the year-earlier period, the company said today.
HEI reported a profit of $21.6 million, or 67 cents a share, for the three months through Sept. 30, compared with a profit of $27.8 million, or 87 cents a share, in the 1998 quarter. Revenues were up 4 percent at $392.5 million in the latest quarter, compared with $377.3 million in the 1998 period.
HEI agreed early in August to sell its shipping businesses, Hawaiian Tug & Barge Corp. and Young Brothers Ltd., to a Seattle-based shipping business, Saltchuk Resources Inc. Closing the deal is subject to approval by the state Public Utilities Commission and federal authorities. HEI opted to take the charge in the third quarter for the expected loss.
Despite a 6.8 percent increase in revenues at Hawaiian Electric Co. and company's other utilities in the islands, the utility business turned in a third-quarter net profit of $20.3 million, down 19 percent from $25 million in the year-earlier quarter.
Robert F. Clarke, HEI chairman, president and chief executive officer, said the utilities had higher costs for maintenance, financing and depreciation.
American Savings Bank, HEI's financial subsidiary, reported a profit increase of 8 percent, to $8.5 million in the latest quarter from $7.9 million in the 1998 quarter.