Weak shipping demand sank Matson Inc.’s earnings in the fourth quarter.
The state’s largest ocean freight transportation company said after the market closed Wednesday that volume from Hawaii, China, Alaska and Guam all declined from the year-earlier period.
Matson, which will report its final results Feb. 21,
said in its preliminary results that it expects its fourth-quarter net income to come in at a range of $69.9 million to $74.8 million and earnings per share to range from $1.88 to $2.01. Analysts are looking for EPS of $3.42.
Shares of the company inched up 8 cents to $63.72 during the regular session but tumbled $1.22, or 1.9%, to $62.50 in after-hours
trading.
“We expected the fourth quarter of 2022 and first quarter of 2023 to be challenging in the Transpacific tradelane as retailers’ inventories adjust to consumer demand
levels and as ocean liners reduce vessel capacity to meet lower demand levels,” Matson Chairman and CEO Matt Cox said in a statement. “Currently in the Transpacific marketplace, business conditions remain challenging as retailers continue to right-size inventories amidst weakening consumer demand, increasing interest rates and economic uncertainty.”
Hawaii container volume decreased 13% from the year-earlier quarter primarily due to lower retail- and hospitality-related demand and one less week.
Alaska volume decreased 7.7% primarily due to lower northbound volume mostly due to one less sailing and one less week, and lower southbound volume primarily due to lower domestic seafood volume and one
less week.
Guam volume fell 14% primarily due to lower retail-
related demand.
China volume tumbled 47.2% primarily due to lower demand for the company’s express services between China and Long Beach, Calif., the discontinuation of its China-California Express (Shanghai-Long Beach-Oakland, Calif.) service in the third quarter, and one less week.
Cox said he expects conditions to improve in the back half of this year.
“Absent an economic ‘hard landing’ in the U.S., we expect improved trade dynamics in the second half of 2023 as the Transpacific marketplace transitions to a more normalized level of
demand,” he said.
