Matson Inc. earned a monster first-quarter profit that even it underestimated less than two weeks ago.
Hawaii’s largest ocean cargo transportation firm announced Tuesday that it earned $87.2 million in the first three months of this year, compared with $3.8 million in the same period last year.
The company said its nearly year-old move to expand expedited premium service from China in response to increased demand for goods amid the coronavirus pandemic primarily drove the higher first-quarter profit that topped what Matson earned during all of 2019: $83 million.
Matson’s January-March profit also exceeded the company’s own expectation, announced April 15, to earn between $80 million and $85 million in the quarter.
Matt Cox, Matson chairman and CEO, made the same comment Tuesday and on April 15 about the first-quarter financial performance representing a “strong start” to the year.
“Our financial performance in the China service was the primary driver of the increase in consolidated operating income year-over-year,” he said.
Honolulu-based Matson has been riding high on extra demand for cargo shipped from China to the mainland since the pandemic took hold early last year.
The company, which has served China for about 15 years, began broadening its service there in May using chartered ships before leasing six ships that now run weekly and command premium cargo rates driven by strong customer demand for goods including personal protective equipment, cleaning products, home improvement supplies, electronics for working from home and many e-commerce goods.
To further enhance its China service, Matson in August added stops in Alaska to pick up seafood for delivery in Asia as a way to make more money on the return trip to China from California.
The entire pumped-up China service helped Matson earn $193 million last year, more than double its $83 million 2019 profit.
Cox said he expects heightened demand for goods from China will continue into late October. He also noted that significant supply chain congestion exists at California ports.
Total revenue for Matson in the first quarter was $712 million, up 39% from $514 million a year earlier.
Cargo volume in the first quarter soared 219% from China routes that include port stops in Xiamen, Ningbo and Shanghai.
In Hawaii, Matson’s cargo volume edged up 0.6% in the first quarter.
In Matson’s two other major markets, volume was down 5% in Alaska and up 2% in Guam.
Shares of Matson stock closed Tuesday at $67.64 before the earnings announcement. Shares of company stock on the New York Stock Exchange over the past 52 weeks have closed between a $24.92 low on May 15 and a $77.51 high on March 11.
FIRST-QUARTER NET
$87.2 million
YEAR-EARLIER NET
$3.8 million
