Horizon Lines, Inc. – Press Release.
The link above the the press release for Horizon Lines HRZ first quarter earnings results from late last week. Also note the company declared a regular 11ยข quarterly dividend the previous day. Horizon is a container shipping company that operates primarily between the mainland U.S. and Alaska, Hawaii and Puerto Rico. It is the largest player in the inter-U.S. shipping business and relatively immune from competition.
I think one paragraph sums up the quarter for HRZ:
Operating Revenue – Operating revenue declined 11.0% to $272.4 million from $305.9 million a year go. The largest factor in the decline was reduced fuel surcharges resulting from lower fuel prices, followed by a 7.1% overall volume decline. The volume decline was due primarily to the sharp economic slowdown in Hawaii, a continuing recession in Puerto Rico and a severe winter in Alaska. The volume decline was partially offset by revenue per container improvements in all tradelanes. Revenue per container increased by $107, or 3.3%, net of fuel, from the prior year.
Bookkeeping and legal fees make it tough to sort out the profit or loss, but it appears the company has the cash flow to keep operating in the current economic environment. I see Horizon as a play on the economic recovery of the U.S. and you are currently earning a 10% dividend while you wait. Not a lot to get excited about HRZ, but nothing truly scary either. And they are still paying a dividend.
One Comment
HRZ proved technical support 3/20 with a benchmark price of $3.37 and again most recently 4/28 with a benchmark price of $3.75. The price has since almost doubled, but IMO there should be considerably more upside considering technical support is very strong. So, if economic recovery does continue, the technicals for HRZ are highly likely to remain strong.
HRZ looks like a very good trade from here from a technical perspective. If the general market were to begin to suffer several major setbacks, it might be wise taking steps to protect your capital first and ask questions later. Protecting your capital is job #1! This is not meant as financial advice, and investors are solely responsible for their own decisions. Please DYODD.