drop in second quarter and first half results.

The company said its earnings were hit hard by the European Union's decision to ban duty-free sales on international ferries last year and a $5 million increase in fuel costs.

For the quarter ended June 30, Sea Containers reported earnings of $13.9 million, or 75 cents per share, compared to $23.2 million, or $1.25 per share, last year. Half-year earnings stood at $6 million compared to $14.4 million for the first six months of last year. Revenue for the periods was $351 million and $629 million.

The company last week spun off its Orient-Express Hotels subsidiary at $19 a share, generating $400 million.

Sea Containers president, James B. Sherwood, said the company's passenger transport division were highly seasonal. Operating profits of the company's passenger transport division in the second quarter were $17.7 million, down $5.5 million from the prior year period.

BUSINESS BUC