Shipper moves into black

Horizon Lines posts a net profit and beats analysts' estimates

Horizon Lines Inc., which accounts for 36 percent of the shipments from the mainland to Hawaii, Alaska, Guam and Puerto Rico, swung to a net profit of $2.4 million in the first quarter and beat analysts' estimates by 2 cents.

The second-largest ocean shipper in the islands said today that revenue increased 6.7 percent to $274.9 million from $257.6 million.

Horizon had a net loss of $9.7 million, or 52 cents a share, in the first quarter of 2005. After adjustment for nonrecurring expenses, Horizon's net income in the first quarter of 2005 was $300,000, or 1 cent a share.

Earnings per share this quarter were 7 cents, topping analysts' estimate of 5 cents, according to Thomson Financial.

The Charlotte, N.C., company, which went public in September, also said it expects second-quarter earnings of 18 cents to 20 cents a share and revenue of $282 million to $287 million. Its full-year guidance was for a profit of 85 cents to 90 cents on revenue of $1.14 billion to $1.16 billion.

"Horizon Lines picked up in 2006 where we left off in 2005 and the year is off to a great start," said Chuck Raymond, president of Horizon.

Last month, Horizon increased its fuel surcharge 3.5 percentage points to 18.5 percent from 15 percent due to rising fuel costs and to match competitor Matson Navigation Co., a subsidiary of Honolulu-based Alexander & Baldwin Inc.

In March, Horizon said it would increase its hauling capacity between Hawaii and the West Coast as a result of a $280 million deal to charter five new U.S.-flagged vessels from Ship Finance International Ltd. The new ships are expected to be deployed in the first half of 2007. The transaction closed on April 11.

Horizon said part of its fleet restructuring will include instituting a dedicated Hawaii service that will start in Tacoma, Wash., and proceed to Oakland, Calif., before heading to Honolulu and back to Tacoma.