Matson 2025 Q1 Earnings Misses Targets as Net Income Doubles

Matson (MATX) reported its fiscal 2025 Q1 earnings on May 06th, 2025. The company's earnings per share (EPS) fell short of analyst expectations, with a reported $2.18 per share against a consensus estimate of $2.34. Despite this, Matson's net income doubled year-over-year, showcasing a significant improvement in profitability. The company's guidance reflects a cautious outlook, expecting lower operating income in the upcoming quarters due to uncertainties in tariffs and global trade.

Revenue
Matson's first-quarter revenue increased by 8.3% to $782 million in 2025 Q1, a rise from $722.10 million in 2024 Q1. Ocean Transportation contributed $637.40 million, driven by higher freight rates in China, while Logistics added $144.60 million, reflecting a modest increase from the previous year. The overall operating revenue for the quarter reached $782 million.

Earnings/Net Income
Matson's earnings per share surged 109.5% to $2.20 in 2025 Q1 from $1.05 in 2024 Q1, indicating strong earnings growth. The net income also witnessed a remarkable increase, soaring by 100.3% to $72.30 million from $36.10 million a year earlier. Overall, the EPS performance reflects a positive trend.

Price Action
The stock price of Matson has dropped 6.01% during the latest trading day, has tumbled 14.55% during the most recent full trading week, and has plummeted 19.18% month-to-date.

Post-Earnings Price Action Review
The investment strategy of acquiring Matson shares following a quarter-over-quarter revenue decline and holding them for 30 days has yielded a 35.20% return over the past five years. In comparison, a benchmark return was significantly higher at 55.98%, resulting in an excess return of -20.78%. The strategy's compound annual growth rate stood at 7.01%. However, it experienced a maximum drawdown of -21.23%, a Sharpe ratio of 0.55, and a volatility rate of 12.76%. These figures suggest that while the strategy has delivered positive returns, it has underperformed relative to broader market benchmarks, with moderate risk-adjusted performance and notable volatility.

CEO Commentary
Matt Cox, Chairman and Chief Executive Officer of Matson, Inc., noted that the first quarter financial performance met expectations, with a significant year-over-year increase in consolidated operating income driven by the China service, benefiting from elevated freight rates and strong demand post-Lunar New Year. He highlighted higher volumes in Hawaii and Alaska, though there was a decline in Guam. Cox expressed caution regarding uncertainties in tariffs, global trade, and the U.S. economy, expecting lower operating income in both Ocean Transportation and Logistics for the second quarter and full year due to these challenges.

Guidance
Matson anticipates that Ocean Transportation operating income in the second quarter of 2025 will be meaningfully lower than in the second quarter of 2024, with full-year results also expected to decline year-over-year. The company expects lower operating income for Logistics as well, due to a challenging environment across all business lines. Overall, both container volume and average freight rates for 2025 are projected to decrease compared to the prior year, influenced by uncertainties in global trade and economic conditions.

Additional News
In a significant move, Matson announced a quarterly dividend of $0.34 per share, scheduled for payment on June 5th, 2025, to shareholders of record as of May 8th, 2025. The company's decision to repurchase approximately 0.5 million shares in Q1 2025, amounting to $69.2 million, reflects a strategic focus on enhancing shareholder value. Additionally, Matson's Executive Vice President, John P. Lauer, executed a notable sale of 7,985 shares, contributing to insider trading activity during the quarter.