Wednesday, July 30, 2014         

 Print   Email   Comment | View 0 Comments   Most Popular   Save   Post   Retweet

Horizon Lines posts loss in wake of antitrust case

The container shipper is out $52.7 million in what an executive calls a "challenging" quarter

By Kristen Consillio


After reaching a $45 million settlement for breaking federal antitrust laws, Horizon Lines Inc. recorded a loss of $52.7 million, or $1.71 per diluted share, in the fourth quarter.

By comparison, Hawaii's second-largest container shipping company made a profit of $1.3 million, or 4 cents per diluted share, in the fourth quarter of 2009.

The Charlotte, N.C.-based carrier, which agreed to plead guilty to price-fixing related to its Puerto Rico service, is paying a $45 million fine over five years and booked a $30 million charge against earnings for the fiscal year ended Dec. 26.

For the year, Horizon recorded a $54.5 million loss, or $1.77 per diluted share, compared with a loss of $31.3 million, or $1.03 per diluted share, in 2009.

"The fourth quarter turned out to be very challenging, due to lower-than-anticipated volumes in Hawaii, particularly in the latter months of the quarter, increased fuel prices, continuing rate pressures in Puerto Rico, and anticipated startup costs related to our new China service," said Brian Taylor, executive vice president and chief operating officer, in a statement.

Horizon generated $298.8 million in revenue in the quarter, up from $286.7 million in the year-earlier quarter. Annual revenue grew to $1.2 billion from $1.1 billion in 2009.

Excluding the settlement and other charges totaling $36.2 million after taxes, the fourth-quarter loss was $10.2 million, or 33 cents per diluted share. That compares to net gains of $3.9 million, or 12 cents per diluted share, after excluding antitrust legal expenses and other costs, a year earlier.

The annual net loss excluding one-time charges totaled $4 million, or 13 cents per diluted share, compared with a net gain of $19.1 million, or 62 cents per diluted share, in 2009.

In a conference call with investors yesterday, the company said lean inventories and slow construction activity resulted in lower-than-expected volume in the quarter. While tourism is recovering, improvement in other sectors such as construction and real estate takes time, Taylor told investors.

The company forecasts continued improvements in the tourism sector in 2011 and modest recovery in the other sectors, he said.

Taylor added that Horizon's military segment was stable during the recession and is expected to remain consistent this year.

"We're adopting a conservative assessment regarding the 2011 business outlook for this lane, at least until we start to see more evidence of an economic recovery really demonstrated in volume growth," he said. "As such, look for Hawaii to generate modest volume growth and a slight improvement in rate here in 2011."

The company said it accounts for about 37 percent of total U.S. marine container shipments from the mainland to Alaska, Puerto Rico and Hawaii, as well as Guam and Micronesia.

 Print   Email   Comment | View 0 Comments   Most Popular   Save   Post   Retweet

You must be subscribed to participate in discussions
By participating in online discussions you acknowledge that you have agreed to the TERMS OF SERVICE. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. Because only subscribers are allowed to comment, we have your personal information and are able to contact you. If your comments are inappropriate, you may receive a warning, and if you persist with such comments you may be banned from posting. To report comments that you believe do not follow our guidelines, email commentfeedback@staradvertiser.com.
Leave a comment

Please login to leave a comment.
Latest News/Updates
Political Radar

Political Radar
Hilton; Plaza Club

Political Radar
Direct mail

Political Radar
Direct mail

Aperture Cafe
Ramadan #latergram

Wassup Wit Dat!
Go Guess ‘Em Go