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Matson Shares Rise 37% on Strong Preliminary Q2 Financial Results

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Shares of Matson Inc. traded higher after the company reported preliminary Q2/20 financial results that included a greater than 100% growth in year-over year Ocean Transportation operating income.

Ocean transportation and logistics services company Matson Inc. (MATX:NYSE) yesterday announced preliminary second quarter financial results for the period ending June 30, 2020, and provided an update on business operations.

The company's Chairman and CEO Matt Cox remarked, "Matson's businesses performed well in the second quarter despite challenges from the COVID-19 pandemic and subsequent economic effects. The operational and financial actions we have taken in the last few months have helped Matson through this difficult period and have led to opportunities. One such opportunity, the introduction of the additional CLX vessel charter sailings, principally drove the increase in consolidated operating income year-over-year. We will continue to offer this supplemental 'CLX+' service through the peak season and potentially longer as our customers' needs dictate."

"Overall, our performance in the second quarter was led primarily by the strength in our China service, including chartered voyages in addition to our normal weekly vessels that sailed at capacity...Matson expects second quarter operating income for Ocean Transportation of $40.5 to $42.5 million and Logistics operating income of $8.0 to $9.0 million. We also expect second quarter 2020 net income and diluted EPS to be $30.4 to $32.6 million and $0.70 to $0.75, respectively," CEO Cox added.

The company stated that Ocean Transportation operating income improved year-over-year due to the strength of its CLX tradelane and that the gains were partially offset somewhat by declines in its domestic routes. The firm listed that Logistics operating income declined year-over-year as a result of lower contributions from transportation brokerage and freight forwarding services.

The company advised that Hawaii container volume decreased 4% in Q2/20 compared to Q2/19 primarily due to lower volume from the state's COVID-19 mitigation efforts and Alaska volume decreased 9% for similar reasons due to lower demand for retail-related goods and that state's own particular COVID-19 mitigation measures.

The firm noted that China volume increased by 68.1% primarily due to volume from chartered voyages in addition to the regular CLX service.

The company also stated that it decreased its total debt in Q2/20 by $34.9 million to $890.0 million and that as of June 30, 2020, it had approximately $425 million available under its revolving credit line.

Matson Inc is a provider of ocean transportation, logistics and terminal services headquartered in Honolulu, Hawaii. The company services many routes to Hawaii, Alaska, Guam, Micronesia and the South Pacific. The firm in addition operates a premium, expedited service from China to Southern California and also provides services to Okinawa, Japan. The company operates a fleet of owned and chartered vessels including container ships, combination container and roll-on/roll-off ships and custom-designed barges and a logistics company that provides integrated logistics services that include rail intermodal, highway brokerage, warehousing, freight consolidation, Asia supply chain services, and freight forwarding.

Matson began the day with a market capitalization of around $1.2 billion with approximately 43.04 million shares outstanding. MATX shares opened more than 24% higher today at $33.99 (+$6.63, +24.23%) over yesterday's $27.36 closing price. The stock has traded today between $32.82 and $38.48 per share and is currently trading at $37.52 (+$10.16, +37.13%).


1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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