U.S.-based container ship operator Matson (NYSE: MATX) reported first quarter 2019 results that were above analysts’ estimates, thanks to strength in the company’s logistics business.
The Honolulu-based Matson reported net income of $12.5 million for the first quarter, down from the $14.2 million it reported a year earlier.
But earnings per share of $0.29 managed to beat analysts estimates of $0.25 per share.
Revenue of $532.4 million was up 4 percent from a year earlier period. Chief Executive Officer Matt Cox credited the results to Matson’s logistics segment posting stronger-than-expected operating income.
“In our logistics segment, we performed exceptionally well with positive contributions across all service lines,” Cox said.
Logistics’ revenue in the first quarter was $134.5 million, up 1.8 percent from a year earlier. Operating income nearly doubled to $8.1 million, with a 6 percent margin.
The increase was primarily due to better results from transportation brokerage and freight forwarding.
Matson also raised its operating earnings outlook for 2019 with logistics operating income to be “moderately” higher than the $32.7 million level achieved in 2018.
The company’s ocean transportation revenue of $397.9 million was up 5 percent from a year earlier. Revenue got a boost from the collection of fuel surcharges and better volumes in its China container business, which saw a 16 percent rise in container volumes for the quarter.
But the company’s primary markets servicing the Jones Act trade lanes of Hawaii and Alaska were down year-on-year in volumes.
Those impacts, along with weather-related delays, lease expenses and higher terminal handling costs pushed ocean operating income down to $9.5 million from $24.5 million a year earlier.