Executives of Horizon Lines, the second largest shipping company serving the Islands, said yesterday the slowdown in Hawai'i's economy will likely have only a modest impact on the firm's financial performance.

However, Horizon's CEO expressed concern that the company's Hawai'i operations would be more affected by an economic slowdown than its business in Alaska.

"We are in good shape in Alaska. Hawai'i would probably be the one that we will be a little concerned about," said Charles Raymond, chairman, president and chief executive officer of Horizon Lines Inc. "(In) Hawai'i, we have tempered our appetite for volume," he said, indicating the company is adjusting to slower growth.

Raymond made his comments in a conference call following the release of Horizon's fourth-quarter financial results.

John Keenan, president of Horizon Lines LLC, said he remained optimistic despite signs that Hawai'i's economy is showing signs of fatigue.

"The commercial construction that we have been seeing in Hawai'i will certainly offset ... some of the softening that you see in residential construction," Keenan said in the conference call. "And the high levels of federal spending in Hawai'i is another important economic driver."

Horizon said its fourth-quarter earnings edged up as stable vessel rates and a diversified cargo mix balanced higher fuel costs and weakness in the container shipping company's Puerto Rican business.

The company earned $10.7 million, or 32 cents per share, compared with $10.6 million, or 31 cents per share, in the year-ago quarter. Operating revenue rose 10 percent to $316 million, from $287.5 million in the prior-year period.

Analysts were expecting a profit of 31 cents per share on revenue of $312.4 million, according to a poll by Thomson Financial.

The company said a more profitable cargo mix, stable rates in offshore markets and cost cuts offset continuing weakness in its Puerto Rican business and "unprecedented increases" in fuel prices.

"I know we were buying fuel at $281 a ton in January (2007), and by the end of December (2007), we are buying it at $464 a ton," Raymond said. "We certainly didn't increase our fuel surcharge by 100 percent."

For the full year, profit sank 60 percent to $28.9 million, or 85 cents per share, compared with $72.4 million, or $2.14 per share, in 2006. Revenue rose 4 percent to $1.21 billion.

Horizon cited its acquisition of Hawaii Stevedores Inc. last year as a plus for the company's balance sheet. Horizon also acquired San Francisco-based Aero Logistics.

"Aero Logistics and Hawaii Stevedores contributed nicely to the revenue growth during the year comparatively," said M. Mark Urbania, Horizon's chief financial officer.