Lockout Alexander & Baldwin Inc., crippled by a dockworkers' lockout that cost the company more than $13 million overall, said yesterday that fourth-quarter earnings plunged 62.6 percent from a year ago.
slams A&B
The West Coast dock shutdown
and a stock sale a year ago combine
to drop fourth-quarter profit 62.6%By Dave Segal
dsegal@starbulletin.comThe lockout, which began in late September and cost the company $12 million in added expense and lost revenue in the final quarter, shut down subsidiary Matson Navigation Co.'s ocean freight business for a week and a half and created schedule disruptions for weeks thereafter.
A&B also had its year-to-year quarterly comparison greatly impacted by the 2001 fourth-quarter sale of BancWest Corp. stock that netted A&B a one-time gain of $68.4 million, or $1.69 per share.
"In the fourth quarter, the West Coast longshore labor disruptions spoiled what had been, up to that time, a strong improvement in quarterly earnings since the start of the year," said Allen Doane, president and chief executive officer of A&B.
A&B ended with fourth-quarter net income of $17.3 million, or 43 cents a share, compared with $46.4 million, or $1.15 a share, a year earlier. Revenue fell 20.6 percent to $281.9 million from $355.2 million a year earlier.
In connection with yesterday's earnings announcement, A&B also said it was maintaining its dividend at 22.5 cents a share for the first quarter. It is payable March 6 to shareholders of record as of the close of business Feb. 13.
Despite the fourth-quarter difficulties, Doane said it was a "good performance" because A&B's earnings nearly matched the $17.8 million, or 43 cents a share, in net income from the third quarter.
For the year, A&B's net income declined 47.4 percent to $58.2 million, or $1.42 a share, from $110.6 million, or $2.73 a share, while revenues dropped 8.4 percent to $1.1 billion from $1.2 billion in 2001.
However, the performance of the past two years are closer together when excluding the 2001 one-time sale of BancWest and Bank of Hawaii Corp. stocks, offset by one-time asset revaluations during the same year. When those one-time items are factored out, A&B ended up with earnings of $1.48 per share in 2001 compared with the just-reported $1.42.
A&B, which also has real estate and food operations, said it has taken a number of actions intended to increase its 2003 earnings, including Matson's implementation of a terminal handling surcharge to neutralize the company's cost increases.
"With the gradual return of steady state operations, and normal schedules, we again can target improvements in Matson's cost structure," Doane said.
In the fourth quarter, Matson's revenue increased 9 percent to $174.7 million from $160.3 million a year earlier. The company said that Hawaii service container volume rose 1 percent from the year-earlier quarter due primarily to West Coast demand while automobile volume was 11 percent higher due to increased rental car activity and higher retail auto demand in Hawaii.
Matson's fourth-quarter operating profit jumped 475 percent to $9.2 million from $1.6 million in the year-earlier quarter, a three-month period that was depressed by the aftereffects of 9/11.
A&B's intermodal services, the land portion of Matson's freight movement, improved in the fourth quarter due to new customer activity.
Revenue rose 70 percent to $52.4 million from $30.9 million while operating profit more than doubled to $623,000 from $271,000.
While A&B was trying to navigate Matson's turbulent quarter, the parent company's real estate subsidiary was wheeling and dealing to cap off an active year. A&B now owns 18 properties on the mainland and 26 in Hawaii, comprising more than 5 million square feet of leasable retail, office and industrial space.
During the year, A&B sold two shopping centers and two industrial properties and acquired two shopping centers and a warehouse/office property.
A&B's operating profit from property leasing activities in the fourth quarter rose 5 percent to $8.4 million from $8 million while occupancy levels in the quarter averaged 94 percent compared with 93 percent a year earlier. In Hawaii, the occupancy level was 90 percent compared with 88 percent a year earlier. The company attributed the increase to contributions from newly acquired properties and re-leasing available space.
Property sales in the quarter, including discontinued operations, had revenue $31.9 million, a rise of 168.1 percent from $11.9 million a year earlier. Operating profit doubled to $5.2 million from $2.6 million a year earlier.
The food division, which consists of sugar, coffee and C&H Sugar Co., swung to an operating profit of $5.9 million from an operating loss of $3.9 million a year earlier due to higher sugar production and lower costs per ton. There also was a write-off of residual power generating assets in the fourth quarter of 2001.
Alexander & Baldwin Inc.
BancWest Corp.
Bank of Hawaii Corp.
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