HONOLULU, May 04, 2010 (BUSINESS WIRE) --Alexander & Baldwin, Inc. (NYSE:ALEX) today reported that net income for the first quarter of 2010 was $17.3 million, or $0.42 per diluted share. Net income in the first quarter of 2009 was $3.0 million, or $0.07 per diluted share. Revenue for the first quarter of 2010 was $345.0 million, compared to $315.3 million for the first quarter of 2009.

COMMENTS ON QUARTER

"We are pleased by the Company's solid start to 2010. Ocean Transportation and Real Estate Sales performance drove quarterly earnings higher, more than offsetting expected declines in Real Estate Leasing performance. We are also benefiting from cost reductions implemented in late-2008 and throughout 2009 that positioned the Company for improved financial performance," said Stanley M. Kuriyama, A&B's president and chief executive officer.

"Recent improvement in our national and local economies has been a welcome development. Improving business investment and consumer demand on the Mainland, coupled with reduced China trade lane capacity, has resulted in a significant increase in container volumes in our China shipping service. In addition, Hawaii container volumes appear to have stabilized near volumes we saw a year ago."

"In Real Estate, we are seeing continued demand and favorable pricing for quality commercial properties, as evidenced by our sale of the Mililani Shopping Center in January. However, the effects of a still soft Mainland real estate market continue to impact our leasing portfolio's performance, and development sales remain minimal."

"Our expectation for significant improvement in Agribusiness performance in 2010 is unchanged. Yield forecasts remain positive, and although market prices for sugar have fallen recently, we have forward-priced over 70 percent of our 2010 crop at favorable levels. We continue to focus our efforts on restoring profitability and maintaining access to water."

"Besides our day-to-day operations, we remain highly focused on future growth opportunities. Our recent announcement regarding federal funding to support biofuel research on Maui gives us an important boost in our efforts to convert HC&S to an energy farm. In real estate, we continue to seek development investments in Hawaii, and recently completed acquisitions of two modest non-performing mortgage loans in the state. We also acquired a large retail center in Boulder, Colorado in January, and acquired the Lanihau Shopping Center in Kailua-Kona shortly after the first quarter's end. Both acquisitions were completed under our 1031 exchange program."

"All in all, we are encouraged by what we see both inside and outside the Company. While it is premature to establish any definitive trends or a firm outlook, we are pleased that our first quarter performance in our various lines of business has generally met or exceeded our expectations."

TRANSPORTATION--OCEAN TRANSPORTATION

Revenue for the first quarter of 2010 was 14 percent higher than in the same quarter of 2009 due primarily to higher volumes in the China trade lane, and $12.6 million of higher fuel surcharges from higher fuel prices.

Excluding a $6.0 million charge related to Matson's workforce reduction program recorded in the first quarter of 2009, operating profit increased by $4.9 million compared with the first quarter of 2009. This increase was due to higher China and Guam container volumes, increased Hawaii auto volumes, higher earnings from our SSAT joint venture, and lower general and administrative expenses. Partially offsetting these increases were higher terminal handling expenses, lower Hawaii container volumes, and increased vessel expense.

China volumes were near capacity due to healthy demand and reductions in industry capacity. Hawaii container volumes declined 3 percent. Approximately half of this reduction, however, resulted from a change in the year-end sailing schedule that shifted cargo from January 2010 into December 2009. The balance of the decline was due to continued reductions in westbound construction materials and eastbound agricultural products. The timing of fleet orders for new cars by rental car companies and returns of used rental cars to the Mainland drove improvements in Hawaii auto volumes in the quarter.

TRANSPORTATION--LOGISTICS SERVICES

First quarter 2010 Logistics Services revenue of $77.1 million was slightly higher than in the first quarter of 2009, due primarily to increases in Highway volume resulting from a large movement for the Department of Defense. Operating profit of $1.9 million was $0.4 million, or 27 percent higher than in the same quarter last year, due principally to an improvement in Highway volume and lower general and administrative expenses, partially offset by lower Intermodal yields.

REAL ESTATE--INDUSTRY

Real Estate Leasing and Sales revenue and operating profit are analyzed before discontinued operations are removed. This is consistent with how the Company evaluates and makes investment, disposition and capital allocation decisions.

REAL ESTATE--LEASING

The Company regularly makes dispositions of commercial properties from its leasing portfolio and land under ground leases or vacant land parcels and subsequently reinvests proceeds, on a tax-deferred basis, in new properties. As a result, the Company typically incurs higher depreciation and amortization expenses attributable to a step-up in the cost basis of its properties or to the replacement of formerly non-depreciable property with depreciable property. Due to the inherent timing lag between disposition and reinvestment, the Company also incurs modest loss of revenue and income in these interim periods.

Real Estate Leasing revenue for the first quarter of 2010 declined 13 percent to $23.6 million, and operating profit declined 24 percent to $9.1 million, compared to the first quarter of 2009. Revenue and operating profit were lower due principally to lower Mainland occupancies and rents, as well as the timing of commercial property acquisitions and dispositions. The net effect of acquisitions and dispositions of commercial properties in the first quarter reduced leasable space by 163,800 square feet compared with the same quarter a year ago.

REAL ESTATE--SALES

The comparability of operating results for Real Estate sales from period to period is affected by the episodic nature of transactions and the mix of property types sold, as margins vary between asset classes. For these reasons, reported operating profit from period to period may not be comparable and current period performance may not be a reliable indicator of future results.

First quarter 2010 Real Estate sales revenue and operating profit were significantly higher than the same quarter last year, due principally to the sale of the Mililani Shopping Center in January 2010 and other property sales.

AGRIBUSINESS

Agribusiness revenue for the first quarter of 2010 decreased 20 percent compared with the same quarter of 2009, due to the absence of bulk raw sugar sales. The 2010 sugar harvest started later, as planned, to allow additional time for crop growth and factory maintenance.

Operating loss improved by $0.8 million, compared to the first quarter of 2009, due principally to $3.2 million of negative bulk raw sugar margins recorded in the first quarter of 2009, partially offset by a $1.9 million valuation adjustment in the first quarter of 2010 to coffee inventory.

CORPORATE EXPENSES

First quarter 2010 corporate expenses of $6.6 million increased $0.5 million compared with the first quarter of 2009, due principally to higher settlement expenses for non-qualified benefit plans related to retirements.

CONDENSED CASH FLOW TABLE

Alexander & Baldwin, Inc., headquartered in Honolulu, is engaged in ocean transportation and logistics services, through its subsidiaries, Matson Navigation Company, Inc. and Matson Integrated Logistics, Inc.; in real estate, through A&B Properties, Inc.; and in agribusiness, through Hawaiian Commercial & Sugar Company and Kauai Coffee Company, Inc. Additional information about A&B may be found at its web site: www.alexanderbaldwin.com.

Statements in this press release that are not historical facts are "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. These forward-looking statements are not guarantees of future performance. This release should be read in conjunction with our Annual Report on Form 10-K and our other filings with the SEC through the date of this release, which identify important factors that could affect the forward-looking statements in this release.

SOURCE: Alexander & Baldwin, Inc.

Alexander & Baldwin, Inc.
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