Earnings

Matson Earns $6.96 A Share As China Service Booms, And Expects Fourth-Quarter Operating Income About 50% Higher

The shipper's China route is carrying more cargo at higher rates, and it expects those conditions to last into early 2027.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Matson Earns $6.96 A Share As China Service Booms, And Expects Fourth-Quarter Operating Income About 50% Higher

Matson, the Honolulu-based ocean shipping and logistics company, earned $6.96 per diluted share in the third quarter, up from $4.24 a year earlier, as strong demand and high freight rates on its China service drove the gain. The company also raised its full-year outlook in its Wednesday earnings release.

China service lifts the quarter

Revenue rose to $1,113.5 million from $880.1 million, and net income reached $209.4 million versus $134.7 million. Consolidated operating income was $255.2 million against $161.0 million, and EBITDA, earnings before interest, taxes, depreciation and amortization, climbed to $310.6 million from $212.3 million.

Ocean Transportation did the heavy lifting. Its operating income rose to $239.1 million from $147.4 million, and China container volume increased 16.0%. Chairman and CEO Matt Cox said the gain was "particularly compared with last year's muted peak season." Logistics operating income edged up to $16.1 million from $13.6 million.

The company's own slides say freight demand strengthened over the quarter, with e-commerce customers filling inventory before the holidays. Weather disruptions, blank sailings and port congestion in Asia tightened Transpacific capacity.

Fourth-quarter guidance

Cox said he expects the China conditions to continue through year end and into early 2027. The company expects fourth-quarter consolidated operating income to be approximately 50% higher than the $143.7 million of the year-ago quarter. Ocean Transportation income is guided to about 50% above $136.0 million, and Logistics modestly above $7.7 million.

On the China route specifically, the company expects its ships to be full or nearly full in the fourth quarter, and full-year volume to exceed 2025. It expects an effective tax rate of about 20.0% in the quarter, versus 5.2% a year ago, when a one-time $18.5 million adjustment helped.

A shipper tied to islands and China

Matson carries containerized freight between the U.S. West Coast and Hawaii, Alaska, Guam and other Pacific islands, and runs expedited China-to-Long Beach service. Its Logistics arm handles rail, trucking and freight forwarding.

The domestic trades were mixed. Hawaii volume slipped 0.3% as the state's economy slowed on softer tourism, Alaska fell 4.8%, and Guam rose 4.3%.

Matson repurchased about 0.3 million shares in the quarter for $59.8 million, a figure that includes unsettled purchases and taxes on buybacks. About 3.1 million shares remain under the program, and total debt fell to $331.2 million. A $0.38 dividend is payable December 3.

The earnings call starts at 4:30 p.m. ET Wednesday, and the first new Aloha Class vessel, Makua, is still expected for delivery in the first quarter of 2027.

Sources

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