Matson, the Hawaii shipowner and operator, reported profits that came in within a penny of the top of its own expectations, which were already more optimistic than analysts had predicted.
The New York-listed container ship player reported third-quarter earnings per share of $3.40, a week after the company said it expected to log between $3.23 and $3.41 per share when it finished tallying up its income statement.
Before it offered a sneak peek of its earnings report, three analysts polled by Yahoo Finance expected the company to deliver EPS of $2.69 for the quarter.
The upside surprise of the earnings guidance had fuelled a one-day surge of 9.5% in Matson’s share price, which reached $93.45 on Tuesday, though it has since slipped to a closing price of $90.43 on Monday, before the final results announcement.
The company reported a bottom-line profit of $120m, which was also in the upper end of last week’s guidance but well below the $266m earned in the third quarter of 2022 in a market that has seen liner earnings slide.
“Matson’s ocean transportation and logistics business segments continued to perform well despite a challenging business environment and relatively difficult economic conditions impacting the US consumer,” chief executive Matt Cox said on Monday, echoing his own comments a week earlier.
“Within ocean transportation, our China service experienced solid freight demand despite the muted peak season in the transpacific trade lane but generated lower year-over-year volume and freight rates, which were the primary contributors to the year-over-year decline in our consolidated operating income.”
Matson is primarily focused on the protected domestic container and vehicle trades connecting the US mainland to Hawaii, with some ships continuing on to China to participate in the transpacific market. It serves the Alaska and Guam markets.
Container volumes were down across all those trade lanes, including car and truck shipping on Matson’s combination container ship ro-ros.
The company’s core ocean transportation business delivered revenue of $669m in the third quarter, a 27.1% slump from the same period of 2022.
Operating income for the segment fell 62.5% to $118m.
Matson reported company-wide operating costs and expenses of $551m in the third quarter, down from $603m a year earlier, and it paid $20.3m in income tax, down from $68.1m a year earlier.
For the first nine months of the year, Matson’s profits fell to $235m, from $986m in the first three quarters of 2022.
The company ended the third quarter with almost $157m in cash and equivalents out of $4.29bn in assets, and it had more than $438m in debt out of $1.9bn in liabilities.
