Core Viewpoint - Matson's quarterly earnings of $2.18 per share fell short of the Zacks Consensus Estimate of $2.34 per share, representing a year-over-year increase from $1.04 per share, with an earnings surprise of -6.84% [1][2] Financial Performance - The company reported revenues of $782 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.24%, compared to $722.1 million in the same quarter last year [2] - Over the last four quarters, Matson has surpassed consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] Stock Performance - Matson shares have declined approximately 16.1% since the beginning of the year, while the S&P 500 has decreased by -3.3% [3] - The current Zacks Rank for Matson is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.18 on revenues of $878.25 million, and for the current fiscal year, it is $11.41 on revenues of $3.4 billion [7] - The trend of estimate revisions for Matson is mixed, which could change following the recent earnings report [6] Industry Context - The Transportation - Services industry, to which Matson belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Data and Key Metrics Changes - The first quarter consolidated operating income increased by $45.2 million year over year to $82.1 million, driven primarily by higher freight rates in China [19][20] - Net income rose by 100.3% year over year to $72.3 million, with diluted earnings per share increasing by 109.6% to $2.18 [20] - Interest income for the quarter was $9.4 million, up $600,000 from the previous year, while interest expense decreased by $500,000 due to a decline in outstanding debt [20] Business Line Data and Key Metrics Changes - In logistics, operating income decreased by $800,000 year over year to $8.5 million, primarily due to lower contributions from freight forwarding and transportation brokerage [18][19] - The contribution from the SSA terminal joint venture decreased by $6.2 million year over year to $6.6 million, with expectations for 2025 to be lower than the previous year's $17.4 million [16][18] Market Data and Key Metrics Changes - Hawaii container volume increased by 3.2% year over year, while Guam's container volume decreased by 14.3% due to lower demand from retail and food segments [6][16] - Alaska's container volume increased by 4.8% year over year, supported by higher northbound volume [17] Company Strategy and Development Direction - The company is lowering its 2025 outlook due to uncertainties regarding tariffs, global trade, and the US economy [6][9] - A new direct service connecting Ho Chi Minh to Shanghai was announced, reflecting the company's strategy to adapt to changing customer needs and diversify manufacturing locations [10][11] - The company aims to maintain its competitive advantages by focusing on speed, on-time arrivals, and customer service during periods of uncertainty [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the significant uncertainty in tariffs and global trade, expecting container volume and average freight rates to be lower year over year in 2025 [9][23] - The company remains confident in its long-term prospects due to diversification and strong cash flows, despite current market disruptions [27][28] Other Important Information - The company expects to continue returning capital to shareholders through dividends and share repurchase programs [28] - Total debt at the end of the first quarter was $390.8 million, a reduction of $10.1 million from the previous quarter [22] Q&A Session Summary Question: How much capacity is available in Vietnam? - Approximately 20% of current volumes originate from Vietnam, with the ability to increase that volume significantly as needed [33][34] Question: What are the impacts of the 30% decline in China volumes? - The 30% decline is a year-over-year phenomenon, and the impact on operating income can be contextualized by looking at last year's second quarter numbers [74] Question: Will the company consider canceling some MAX sailings? - The company aims to avoid blank sailings, believing that cargo will need to move urgently as inventory runs low [47][49] Question: Is there potential for market share gain from airfreight due to the de minimis exemption changes? - The removal of the de minimis exemption is expected to increase ocean market share as e-commerce shifts from airfreight to ocean freight [56][57] Question: What measures are being taken to mitigate the impact of current market conditions? - The company has implemented a headcount freeze and is deferring capital spending while retaining the ability to recover quickly when conditions improve [70][72]

Matson (MATX) Q1 2025 Earnings Call May 05, 2025 04:30 PM ET Speaker0 you for standing by and welcome to Matson's First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Justin Schoenberg, Investor Relations and Corporate Development at Matson. Please ...

[Q1 2025 Financial & Operational Highlights](index=1&type=section&id=MATSON%2C%20INC.%20ANNOUNCES%20FIRST%20QUARTER%202025%20RESULTS) The company reported significant year-over-year increases in net income, diluted EPS, consolidated revenue, operating income, and EBITDA for Q1 2025, alongside share repurchases Financial Performance Overview | Financial Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $72.3 million | $36.1 million | | Diluted EPS | $2.18 | $1.04 | | Consolidated Revenue | $782.0 million | $722.1 million | | Consolidated Operating Income | $82.1 million | $36.9 million | | EBITDA | $131.7 million | $82.8 million | - The company repurchased approximately **0.5 million shares** during the first quarter of 2025[3](index=3&type=chunk) [Management Commentary & Outlook](index=1&type=section&id=Management%20Commentary%20%26%20Outlook) Management attributes strong Q1 performance to China service but anticipates significant uncertainty and lower operating income for Q2 and full-year 2025 across both Ocean Transportation and Logistics segments [CEO's Performance Review](index=1&type=section&id=CEO%27s%20Performance%20Review) The CEO attributed strong Q1 operating income to the China service, with mixed domestic tradelane volumes and lower Logistics segment performance - The primary driver for the strong Q1 performance was the China service, which benefited from elevated freight rates from Q4 2024 and healthy demand after the Lunar New Year[2](index=2&type=chunk) - Domestic tradelane volumes were higher year-over-year in Hawaii and Alaska, but lower in Guam[2](index=2&type=chunk) - Logistics operating income declined year-over-year, mainly due to reduced contributions from freight forwarding and transportation brokerage[2](index=2&type=chunk) [Business Outlook](index=1&type=section&id=Business%20Outlook) Management anticipates significant uncertainty from tariffs and global trade, projecting lower Q2 and full-year operating income for both Ocean Transportation and Logistics segments - The company faces significant uncertainty from potential tariffs, global trade dynamics, regulatory measures, and the U.S. economy's trajectory[2](index=2&type=chunk) - Ocean Transportation operating income for Q2 2025 is expected to be "meaningfully lower" than Q2 2024, with full-year income also projected to be lower than the prior year[2](index=2&type=chunk)[9](index=9&type=chunk) - Logistics operating income is also expected to be lower in Q2 2025 and for the full year compared to the prior year, attributed to a challenging environment across all its business lines[2](index=2&type=chunk)[10](index=10&type=chunk) [Segment Performance & Outlook](index=2&type=section&id=Results%20By%20Segment) Ocean Transportation operating income surged in Q1 due to China service rates, while Logistics declined, with both segments forecasting lower full-year performance amid market uncertainties [Ocean Transportation](index=2&type=section&id=Ocean%20Transportation) Ocean Transportation operating income surged 166.7% in Q1 2025 due to China service rates, but anticipates lower Q2 and full-year income amid declining demand and trade uncertainties Ocean Transportation Performance | Metric (Q1 2025 vs Q1 2024) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $637.4M | $579.0M | +10.1% | | Operating Income | $73.6M | $27.6M | +166.7% | | **Volume (FEU)** | | | | | Hawaii | 35,700 | 34,600 | +3.2% | | Alaska | 19,700 | 18,800 | +4.8% | | China | 28,500 | 28,900 | -1.4% | | Guam | 4,200 | 4,900 | -14.3% | - The increase in operating income was primarily due to significantly higher freight rates in China and a higher contribution from the SSAT joint venture[18](index=18&type=chunk) - For the full year 2025, Ocean Transportation operating income is expected to be lower than the prior year, with the magnitude dependent on global trade and macroeconomic uncertainties[9](index=9&type=chunk) [Hawaii Service](index=2&type=section&id=Hawaii%20Service) Hawaii service container volume increased 3.2% in Q1 2025 due to a competitor's dry-docking, with full-year volume expected to be comparable to 2024 - Q1 2025 volume increased **3.2% YoY**, primarily due to a competitor's vessel being in dry-dock[4](index=4&type=chunk) - Full-year 2025 volume is expected to be comparable to 2024 levels[4](index=4&type=chunk) [China Service](index=2&type=section&id=China%20Service) China service achieved significantly higher Q1 2025 freight rates, but anticipates lower Q2 and full-year volume and rates due to a 30% April decline post-tariffs - Achieved significantly higher freight rates in Q1 2025 compared to Q1 2024[5](index=5&type=chunk) - Container volume declined approximately **30% year-over-year** in April after tariffs were implemented[5](index=5&type=chunk) - The company expects both container volume and average freight rates to be lower year-over-year for Q2 and the full year 2025[5](index=5&type=chunk) [Guam Service](index=2&type=section&id=Guam%20Service) Guam's container volume decreased 14.3% in Q1 2025 due to lower retail and food/beverage demand, with full-year volume expected to approach 2024 levels - Q1 2025 volume decreased **14.3% YoY** due to lower demand in retail and food/beverage[6](index=6&type=chunk) - Full-year 2025 volume is expected to approach the level achieved in 2024[6](index=6&type=chunk) [Alaska Service](index=2&type=section&id=Alaska%20Service) Alaska's container volume increased 4.8% in Q1 2025 due to higher northbound volume, with full-year volume expected to be comparable to 2024 - Q1 2025 volume increased **4.8% YoY**, mainly from higher northbound volume[7](index=7&type=chunk) - Full-year 2025 volume is expected to be comparable to 2024[7](index=7&type=chunk) [SSAT Joint Venture](index=2&type=section&id=SSAT%20Joint%20Venture) SSAT joint venture contribution increased significantly to $6.6 million in Q1 2025 due to higher lift volume, but is expected to be lower for full-year 2025 - Q1 2025 contribution was **$6.6 million**, a **$6.2 million increase** from Q1 2024, driven by higher lift volume[8](index=8&type=chunk)[19](index=19&type=chunk) - For the full year 2025, the contribution from SSAT is expected to be lower than the **$17.4 million** achieved in 2024[8](index=8&type=chunk) [Logistics](index=2&type=section&id=Logistics) Logistics segment operating income decreased 8.6% in Q1 2025 due to lower freight forwarding and brokerage contributions, with lower Q2 and full-year income anticipated Logistics Performance | Metric (Q1 2025 vs Q1 2024) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $144.6M | $143.1M | +1.0% | | Operating Income | $8.5M | $9.3M | -8.6% | - The decrease in operating income was mainly due to lower contributions from freight forwarding and transportation brokerage, partially offset by a higher contribution from supply chain management[21](index=21&type=chunk) - For the full year 2025, Logistics operating income is expected to be lower than the prior year due to a challenging environment for all business lines[10](index=10&type=chunk) [Full Year 2025 Financial Outlook](index=2&type=section&id=Full%20Year%202025%20Financial%20Outlook) The company projects lower full-year 2025 consolidated operating income due to market uncertainties, providing guidance for key financial metrics and substantial capital expenditures [Consolidated Outlook & Guidance](index=2&type=section&id=Consolidated%20Outlook) Full-year 2025 consolidated operating income is expected to be lower than 2024 due to market uncertainties, with specific guidance provided for depreciation, interest, other income, and effective tax rate - Full-year 2025 consolidated operating income is expected to be lower than the **$551.3 million** achieved in 2024[11](index=11&type=chunk) Full Year 2025 Guidance | Full Year 2025 Guidance | Amount (Approx.) | | :--- | :--- | | Depreciation & Amortization | $200 million | | Interest Income | $31 million | | Interest Expense | $7 million | | Other Income | $9 million | | Effective Tax Rate | 23.0% | [Capital & Dry-docking Expenditures](index=3&type=section&id=Capital%20and%20Vessel%20Dry-docking%20Expenditures) The company made significant Q1 2025 capital investments, projecting substantial full-year expenditures including $305 million for new vessel construction and $100-120 million for other capital needs Capital and Dry-docking Expenditures | Expenditure Type | Q1 2025 Payments | Full Year 2025 Expectation | | :--- | :--- | :--- | | Other Capital Expenditures | $22.5M | $100M - $120M | | New Vessel Construction | $66.7M | ~$305M | | Dry-docking Payments | $10.4M | ~$40M | [Liquidity and Capital Allocation](index=5&type=section&id=Liquidity%2C%20Cash%20Flows%20and%20Capital%20Allocation) The company's cash and cash equivalents decreased in Q1 2025 despite increased operating cash flow, while continuing its capital return program through share repurchases and dividends [Liquidity and Cash Flow](index=5&type=section&id=Liquidity%20and%20Cash%20Flow) Cash and cash equivalents decreased to $122.0 million in Q1 2025, despite net cash from operating activities significantly increasing to $89.0 million, while total debt slightly decreased - Cash and Cash Equivalents decreased by **$144.8 million** during Q1 2025 to **$122.0 million**[22](index=22&type=chunk) - Net cash from operating activities was **$89.0 million** for Q1 2025, compared to **$36.6 million** for Q1 2024[22](index=22&type=chunk) - Total debt decreased by **$10.1 million** to **$390.8 million** as of March 31, 2025[22](index=22&type=chunk) [Capital Return](index=5&type=section&id=Capital%20Return) Matson continued its capital return program in Q1 2025 by repurchasing approximately 0.5 million shares for $69.2 million and declaring a $0.34 per share quarterly cash dividend - Repurchased approximately **0.5 million shares** for a total cost of **$69.2 million** in Q1 2025[23](index=23&type=chunk) - Declared a cash dividend of **$0.34 per share**, payable on June 5, 2025[23](index=23&type=chunk) [Consolidated Financial Statements](index=8&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for Q1 2025 show significant increases in revenue, operating income, and net income, alongside changes in balance sheet items and cash flow activities, with a notable rise in EBITDA [Condensed Consolidated Statements of Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Matson reported total operating revenue of $782.0 million in Q1 2025, leading to a significant increase in net income to $72.3 million, or $2.18 per diluted share Condensed Consolidated Statements of Income | (In millions, except per share) | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Operating Revenue | $782.0 | $722.1 | | Operating Income | $82.1 | $36.9 | | Income before Taxes | $92.2 | $45.3 | | **Net Income** | **$72.3** | **$36.1** | | **Diluted Earnings Per Share** | **$2.18** | **$1.04** | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets slightly decreased to $4.53 billion, primarily due to reduced cash and cash equivalents, while total liabilities also decreased and shareholders' equity remained stable Condensed Consolidated Balance Sheets | (In millions) | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$4,527.0** | **$4,595.4** | | Cash and cash equivalents | $122.0 | $266.8 | | Property and equipment, net | $2,314.0 | $2,260.9 | | Capital Construction Fund | $685.4 | $642.6 | | **Total Liabilities** | **$1,893.8** | **$1,943.4** | | **Total Shareholders' Equity** | **$2,633.2** | **$2,652.0** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased to $89.0 million in Q1 2025, while investing and financing activities led to a net cash decrease of $144.8 million Condensed Consolidated Statements of Cash Flows | (In millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $89.0 | $36.6 | | Net cash used in investing activities | ($129.4) | ($59.0) | | Net cash used in financing activities | ($104.4) | ($85.7) | | **Net Decrease in Cash** | **($144.8)** | **($108.1)** | [Non-GAAP Reconciliation (EBITDA)](index=11&type=section&id=Net%20Income%20to%20EBITDA%20Reconciliations) The company's non-GAAP EBITDA significantly increased to $131.7 million in Q1 2025, up $48.9 million from Q1 2024, reflecting strong underlying operational performance Net Income to EBITDA Reconciliations | (In millions) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $72.3 | $36.1 | $36.2 | | Adjustments (Taxes, Interest, D&A) | $59.4 | $46.7 | $12.7 | | **EBITDA** | **$131.7** | **$82.8** | **$48.9** |

Q1 2025 Performance - Consolidated operating income significantly increased year-over-year, driven primarily by the China service due to elevated freight rates from Q4 2024 and healthy demand[7] - Hawaii container volume increased by 32% year-over-year due to a competitor's vessel dry-docking[8] - Alaska container volume increased by 48% year-over-year, driven by higher northbound volume[41] - Guam container volume decreased by 143% year-over-year due to lower demand from retail and food and beverage segments[34] - Matson Logistics operating income decreased by approximately $08 million year-over-year to $85 million, due to lower contribution from freight forwarding and transportation brokerage[54] - SSAT joint venture contributed $66 million, a year-over-year increase of $62 million, primarily due to higher lift volume[48] - Net income was $723 million, a 1003% increase compared to $361 million in the first quarter of 2024[55] - Approximately 05 million shares were repurchased for a total cost of $692 million in Q1 2025[61] Outlook - The company is lowering its 2025 outlook due to uncertainty in the market regarding tariffs, global trade, regulatory measures, the U S economy, and geopolitical factors[7] - The company expects full year 2025 container volume in Hawaii to be comparable to the level achieved last year[12] - The company expects full year 2025 container volume in Guam to approach the level achieved last year[35] - The company expects full year 2025 container volume in Alaska to be comparable to the level achieved last year[42] - The company expects the contribution from SSAT to be lower than the $174 million achieved last year, excluding the $184 million impairment charge in Q4 2024[44] - The company expects Logistics operating income to be lower than the level achieved last year due to a challenging environment for all business lines[50] - The company expects approximately $225 million in milestone payments during the balance of 2025 from the Capital Construction Fund (CCF)[69]

Core Insights - Matson, Inc. announced the retirement of Rusty Rolfe, Executive Vice President and President of Matson Logistics, effective July 1, 2025, after 24 years of leadership in transforming Matson Logistics into a recognized provider of integrated logistics services [1][2] - Jerome Holland, currently Vice President of Strategic Planning and Business Development at Matson Logistics, will succeed Rolfe, ensuring a seamless transition [2][3] Company Overview - Matson, founded in 1882, is a leading provider of ocean transportation and logistics services, serving non-contiguous economies such as Hawaii, Alaska, and Guam, as well as other island economies in Micronesia [5] - The company operates a fleet that includes containerships and roll-on/roll-off ships, and Matson Logistics extends its transportation network throughout North America and Asia with asset-light logistics services [5]

Core Viewpoint - Matson (MATX) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade indicates a positive outlook for Matson's earnings, suggesting potential buying pressure and an increase in stock price [3][5]. - Matson is projected to earn $11.82 per share for the fiscal year ending December 2025, reflecting a year-over-year decline of 15.2%. However, the Zacks Consensus Estimate has increased by 20.7% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Matson's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Company Overview - Matson, Inc. is a leading provider of ocean transportation and logistics services, founded in 1882 [3] - The company offers ocean freight transportation services to Hawaii, Alaska, Guam, and other Micronesian islands, as well as expedited services from China to Long Beach, California [3] - Matson's fleet includes containerships, combination container and roll-on/roll-off ships, and barges [3] - Matson Logistics, established in 1987, provides integrated logistics services across North America and Asia, including rail intermodal, highway brokerage, and supply chain management [3] Financial Results Announcement - Matson will release its financial results for the first quarter on May 5, 2025 [1] - A conference call is scheduled for 4:30 p.m. ET on the same day, featuring Matt Cox, Chairman and CEO, and Joel Wine, Executive Vice President and CFO [1][2] - The conference call will be available live on the company's website, with a replay accessible approximately two hours after the event [2]

A shipping company operating their fleet exclusively on the pacific is bound to feel the pinch of tariffs and their consequences on trade flows. Matson (NYSE: MATX ) is such a company, the stock is already downStriving to compound knowledge. Long-time fan of Warren and Charlie. Always invert. "To finish first, you must first finish". Investing own and family funds for +20 years. Senior finance roles at public and private corporations for most of that time.Analyst’s Disclosure: I/we have no stock, option or ...

Core Viewpoint - Matson (MATX) demonstrates a strong commitment to shareholders and is actively expanding its operations, leading to impressive share price performance. The current market conditions present a favorable opportunity for investment in MATX shares [1]. Earnings Estimates - The Zacks Consensus Estimate for earnings per share shows significant growth for the first and second quarters of 2025, as well as for the full years of 2025 and 2026, indicating broker confidence in the stock [2]. - The earnings estimate revisions over the past 60 days reflect substantial increases: Q1 by 73.68%, Q2 by 43.75%, E1 by 20.61%, and F2 by 28.12% [3]. Price Performance - MATX shares have appreciated by 18.5% over the past year, outperforming the Zacks Transportation - Services industry, which saw a decline of 1.7% [3]. Earnings Surprise History - Matson has a positive earnings surprise history, exceeding the Zacks Consensus Estimate in each of the last four quarters, with an average surprise of 12.7% [4]. Shareholder Initiatives - The company has expanded its share repurchase program by adding 3 million shares, bringing the total to 15 million shares, with the program running until December 31, 2027 [5][7]. - Since the program's inception in August 2021, Matson has repurchased 11.5 million shares for approximately $1 billion [7]. Fleet Expansion and Modernization - Matson is investing $1 billion in constructing three new "Aloha Class" vessels, which will enhance fleet capacity, operational efficiency, and environmental sustainability. These vessels are designed to reduce greenhouse gas emissions by 40% by 2030 [8].