Domestic ocean carrier Horizon Lines said soft mid-year shipping volume produced declines in third-quarter net profit and operating income despite higher revenue from logistics services and fuel surcharges.
Horizon’s net income for the July-September quarter fell to $7.7 million from $8.4 million a year earlier. Excluding $3.3 million in special charges for antitrust-related legal expenses, an equipment impairment charge and union severance, adjusted net income was $11 million, down from $11.4 million a year earlier, when there were $3 million in special charges.
Operating income decreased to $18.1 million from $19 million a year earlier. Earnings before interest, taxes, depreciation and amortization were $33.4 million, compared with $33.8 million a year earlier. Adjusted EBITDA slipped to $36.8 million from $36.9 million.
Revenue for the quarter rose to $311 million from $308 million, led by a $6.9 million increase in logistics revenue, a $4.9 million increase in fuel surcharges and $2.3 million in terminal services. Container revenue fell $6.2 million and the loss of a government vessel management contract cut revenue $6.6 million.
“A summer slowdown in the pace of economic recovery pressured volumes across all of our markets, resulting in a third-quarter financial performance that was short of our expectations,” said CEO Chuck Raymond.
“We had anticipated a firmer overall economic recovery in the third quarter. However, after some initial inventory rebuilding this past spring, economic activity slowed in our trade lanes as consumer spending remained muted in the face of continuing high unemployment,” Raymond said.
Container volume for the quarter fell 2.8 percent to 65,726 loads, with the largest declines in the Puerto Rico and Hawaii/Guam markets. Alaska loadings were down marginally. Container volume for the first nine months of the year was down 1.4 percent.
Average container rates, excluding fuel, rose to $3,247 from $3,229 a year earlier. For the first three quarters, average rates net of fuel were $3,258, down slightly from $3,266 in 2009.
Horizon’s net income for the July-September quarter fell to $7.7 million from $8.4 million a year earlier. Excluding $3.3 million in special charges for antitrust-related legal expenses, an equipment impairment charge and union severance, adjusted net income was $11 million, down from $11.4 million a year earlier, when there were $3 million in special charges.
Operating income decreased to $18.1 million from $19 million a year earlier. Earnings before interest, taxes, depreciation and amortization were $33.4 million, compared with $33.8 million a year earlier. Adjusted EBITDA slipped to $36.8 million from $36.9 million.
Revenue for the quarter rose to $311 million from $308 million, led by a $6.9 million increase in logistics revenue, a $4.9 million increase in fuel surcharges and $2.3 million in terminal services. Container revenue fell $6.2 million and the loss of a government vessel management contract cut revenue $6.6 million.
“A summer slowdown in the pace of economic recovery pressured volumes across all of our markets, resulting in a third-quarter financial performance that was short of our expectations,” said CEO Chuck Raymond.
“We had anticipated a firmer overall economic recovery in the third quarter. However, after some initial inventory rebuilding this past spring, economic activity slowed in our trade lanes as consumer spending remained muted in the face of continuing high unemployment,” Raymond said.
Container volume for the quarter fell 2.8 percent to 65,726 loads, with the largest declines in the Puerto Rico and Hawaii/Guam markets. Alaska loadings were down marginally. Container volume for the first nine months of the year was down 1.4 percent.
Average container rates, excluding fuel, rose to $3,247 from $3,229 a year earlier. For the first three quarters, average rates net of fuel were $3,258, down slightly from $3,266 in 2009.