Matson’s fourth quarter came in better than expected despite the Hawaiian liner operator seeing its China volumes nearly cut in half.

The New York-listed container ship owner said on Tuesday that it recorded $78m in net income for the last three months of 2022, just ahead of the $69.9m-to-$74.8m range given in January as it looked to temper expectations in back-to-back difficult quarters.

The performance was good for $2.10 in earnings per share, but still significantly lower than the $395m recorded for the same period in 2021.

“We expect Matson’s financial performance in the first quarter of 2023 to be the weakest of the year as normal seasonality returns to our domestic trade lanes and logistics and our China service experiences freight demand levels below normalised conditions,” chief executive Matt Cox said.

Matson said the drop was due to retailers adjusting their inventories as demand for consumer goods weakens.

For its ocean transportation business, the company said container volumes dropped across all trades, with China cratering by 47.2% compared to the same period of the prior year.

Volumes to Hawaii fell by 13%, Guam dropped by 14% and Alaska dipped by 7.7%.

Operating income for the segment fell to $79.8m, at the top end of the $70m to $80m range given in January, but down from the $461m recorded a year ago.

The company has said the third and fourth quarters of 2022 would be the most difficult with a recovery expected in the second half of 2023 as transpacific markets return to normal demand, boosting volumes from China — so long as the US avoids an economic “hard landing”.

It could also benefit from strong economic conditions in Hawaii and Alaska.

The company’s logistics segment brought in $12.8m in operating income in the fourth quarter of 2022, $2m lower than the fourth quarter of 2021, thanks to a lower contribution from its supply chain management business.

On Tuesday, Matson shares fell $4.68, or 6.9%, to $65.39.

After the announcement, the company clawed some of that back in after-market trading, adding or 2% to reach $66.75.