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The first quarter 2007 result included a $2.6 million deferred tax revaluation benefit.
The Charlotte, N.C.-based carrier’s first quarter operating income was $11.6 million, compared to $16.5 million in the 2007 quarter. The company said the operating income decline was mainly due to increased operating expenses related to new vessels added to the fleet and fuel costs rising faster that its fuel surcharges.
Operating revenue gained 11.8 percent to $305.9 million, “driven by higher rates, revenue from acquisitions and increased fuel surcharges, which more than offset some volume softness. Revenue per container improved $320 or 8.9 percent versus 2007.”
| Raymond |
Charles 'Chuck' Raymond, Horizon Lines’ chairman, president and chief executive officer, commenting on the quarterly result said: “Horizon Lines continued to improve the strength and efficiency of its operations in the face of a number of macroeconomic challenges. Reduced southbound volumes in Puerto Rico and extreme weather conditions in our otherwise robust Alaska trade offset the strength of the Hawaii market. Despite these challenges, we grew volumes from key customers and scored impressive wins in our logistics business. As reflected by our revenue growth and revenue per container, our business lines are fundamentally healthy and poised for future growth.
“While fuel prices in the quarter rose at a faster pace than anticipated, we were able to minimize their impact through reduced consumption and fuel cost recovery measures. We also continue to make vital investments in our terminal infrastructure and our EDGE program continues to achieve notable advances. Together, these efforts lay the groundwork for long-term growth and profitability.'
Based on current market conditions, Horizon Lines updated its earnings guidance for 2008, with projections of operating revenue in the $1.315 billion to $1.35 billion range, down from its previous $1.35 billion to $1.37 billion expectation. The financial guidance does not include any potential impact from the Puerto Rico pricing investigation, which the company said cannot be estimated at this time.
“The outlook for our Puerto Rico market in particular is somewhat softer than we had originally anticipated and fuel costs have continued to rise at unprecedented rates, impacting our profitability in the near-term. While we will clearly face some economic challenges in 2008, we are actively taking all measures we can to control our cost base,” said Raymond. “We also remain focused on utilizing our solid cash flows to reinvest in our business, positioning the company to continue providing the highest quality service to our customers, and taking advantage of the eventual rebound in our Puerto Rico market.' ' Simon Heaney
