The shipping company blames declines in volume, including the Hawaii/Guam route
POSTED: 1:30 a.m. HST, Oct 23, 2010
Reduced cargo shipping to Hawaii contributed to a decline in third-quarter profit for Horizon Lines Inc., the state's second-largest ocean cargo transportation firm.
The North Carolina-based company said its net income slipped to $7.7 million in its fiscal third quarter ended Sept. 19, from $8.4 million in the same period last year.
Horizon had anticipated a rise in third-quarter income, but a 2.8 percent decline in shipping volume stymied the expected gain and resulted in what the company called "respectable" but less-than-expected profit.
Horizon said the nation's slight economic recovery appeared to slacken during the summer across all the company's routes, though the softening was greatest in Puerto Rico and Hawaii/Guam markets.
"Volume declines were greatest in Puerto Rico, which remains in recession, and in Hawaii/Guam, which continues to experience a very slow and uneven economic recovery," Chuck Raymond, company chairman, president and chief executive officer, said in a statement.
The company didn't specify how much of a volume decrease it had in Hawaii, but John Vincent Keenan, Horizon's chief operating officer, told stock analysts in a conference call that military business remained firm in Hawaii while the local construction industry showed some early signs of stabilization. The company also noted that some of the slack in Hawaii shipping was due to Walmart adjusting its inventory system.
Raymond said Horizon is experiencing volume trends that have firmed modestly so far in October, but that the company remains more guarded about its outlook for the rest of the year in light of the third-quarter slowdown.
On a per-share basis, Horizon's net income for the third quarter was 25 cents compared with 27 cents a year earlier.
For the first nine months of the year, Horizon posted a net loss of $1.8 million, or 6 cents per share, compared with a net loss of $32.6 million, or $1.07 per share, for the same period a year earlier.
Horizon stock closed yesterday up 33 cents to $4.66 per share after the earnings announcement.