Horizon Lines third quarter earnings fall 24pc

HORIZON Lines has seen its third-quarter profit drop by 24 per cent compared to the same period a year ago to US$8.4 million, down from $11.1 million, on the back of a 5.7 per cent fall in cargo volume.
The carrier`s third quarter revenue decreased by 13 per cent year-on-year to $308 million as revenue per container, net of fuel, was flat. More than half of the company`s revenue decline was attributed to lower fuel surcharges as fuel prices plummeted from a year ago, reports Dow Jones Newswires.
Chairman and chief executive Chuck Raymond said the container shipping line faces a "challenging" fourth quarter as the economic downturn continues to dampen demand across all of its trade lanes as well as reduce volumes handled by its logistics business. Mr Raymond was quoted as saying in the report that he anticipates recovery to be "slow, muted and disparate."
Looking ahead, Mr Raymond anticipates that the carrier`s earnings before interest, taxes, depreciation and amortisation for the whole of 2009 wouldn`t "fall enough to cause the company to default on its credit agreement," the report said.
It added that Horizon Lines has been reducing costs to offset the effects of weaker consumer demand for goods on volumes transported.
This comes as Moody`s Investors Service lowered Horizon`s ratings outlook to negative in August amid concerns that the carrier`s liquidity could come under further pressure by "potential cash settlements of an ongoing US Department of Justice antitrust probe or pending class-action lawsuits related to its shipping services," Dow Jones added.