A small increase in Hawaii cargo shipping and recovering more fuel costs through customer surcharges helped Matson Inc. earn a 25 percent bigger profit in the third quarter.
Hawaii’s largest ocean cargo transportation firm earned $21.5 million during the three months ended Sept. 30 compared with $17.2 million in the same period last year, the company reported Thursday.
Revenue totaled $442 million in the third quarter, up from $415 million a year earlier.
Matt Cox, Matson’s president and CEO, called the results strong, and in part credited economic growth in the state for helping drive more business to the company.
"The Hawaii economy is showing increased vibrancy, and we are earning our share of this growth," he said in a statement.
Matson container volume in Hawaii rose about 4 percent to 35,900 units in the recent quarter compared with 34,600 units a year earlier.
However, cargo volume overall was actually down for Matson, driven by fewer automobile shipments in Hawaii and reduced container shipments in the company’s China service that were offset by increases in container volume in Hawaii, Guam and the South Pacific.
The decrease in Hawaii automobile volume was 21 percent and primarily due to customers using other carriers, Matson said.
The total number of autos and containers carried by Matson in the third quarter was 74,700, down 3 percent from 76,800 a year earlier.
Still, operating income from Matson’s ocean transportation operations surged 67 percent due in part to customer fuel surcharges that helped increase revenue as expenses stayed close to flat.
Unfavorable legal and tax issues in the year-ago quarter also played a part in making net income in the recent quarter look more favorable than last year.
In last year’s third quarter, extraordinary negative impacts included a $3.8 million adverse arbitration decision related to previously co-owned terminal assets in Guam, and a $2.2 million tax allocation related to Matson’s separation from former parent company Alexander & Baldwin Inc. Those combined items — a $6 million hit — compared with $2.1 million in legal and other expenses in the recent quarter stemming from a molasses spill at Honolulu Harbor last year.
Looking forward to the end of the year, Matson said it expects higher fourth-quarter income in part due to continued modest growth in Hawaii cargo shipments.
"Our third-quarter financial results outperformed last year, and as we look to the fourth quarter of this year, we expect overall results to exceed the results achieved in the fourth quarter of 2013," Cox said.
Shares of Matson stock closed Thursday at $27.86, down 4 cents from Wednesday. Shares have traded over the last 52 weeks between $22.97 in February and $28.99 in July.
