Matson's Q3 Net Income Plunges 32% Amid Revenue Dip

Ticker: MATX · Form: 10-Q · Filed: Nov 5, 2025 · CIK: 3453

Sentiment: bearish

Topics: Ocean Transportation, Logistics, Revenue Decline, Net Income Drop, Cash Flow, Capital Expenditures, Share Repurchases

TL;DR

**Matson's Q3 numbers are a red flag; the revenue drop and cash burn for new vessels mean choppy waters ahead for investors.**

AI Summary

Matson, Inc. reported a significant decline in net income for the three months ended September 30, 2025, falling to $134.7 million from $199.1 million in the prior year, a decrease of 32.3%. Diluted earnings per share also dropped to $4.24 from $5.89. Total operating revenue decreased by 8.5% to $880.1 million from $962.0 million, primarily driven by a $80.4 million reduction in Ocean Transportation revenue. For the nine months ended September 30, 2025, net income was $301.7 million, down from $348.4 million in 2024, a 13.4% decrease. Total operating revenue for the nine-month period decreased slightly by 1.5% to $2,492.6 million from $2,531.5 million. Operating income for the quarter decreased by 33.6% to $161.0 million from $242.3 million. The company's investment in SSAT generated $9.3 million in income for the quarter, up from $6.9 million in the prior year. Cash and cash equivalents significantly decreased to $92.7 million as of September 30, 2025, from $266.8 million at December 31, 2024, largely due to $141.7 million in vessel construction expenditures and $225.8 million in common stock repurchases.

Why It Matters

Matson's substantial decline in Q3 net income and revenue signals potential headwinds for investors, reflecting a challenging operating environment in ocean transportation. The significant cash outflow for vessel construction and share repurchases, totaling $367.5 million, indicates a strategic focus on fleet modernization and shareholder returns, but also impacts liquidity. This performance could pressure MATX's stock price and may lead to increased scrutiny from competitors like APL and Pasha Hawaii, who are vying for market share in key Pacific routes. Employees might face pressure if revenue trends continue, while customers could see shifts in service offerings or pricing as Matson navigates these changes.

Risk Assessment

Risk Level: medium — The risk level is medium due to a significant 32.3% decline in net income for the three months ended September 30, 2025, and an 8.5% decrease in total operating revenue. Additionally, cash and cash equivalents dropped sharply from $266.8 million at December 31, 2024, to $92.7 million at September 30, 2025, indicating substantial cash outflows for capital expenditures and share repurchases.

Analyst Insight

Investors should closely monitor Matson's future revenue trends, particularly in its Ocean Transportation segment, and assess the return on investment from its significant vessel construction expenditures. Consider if the current share repurchase strategy is sustainable given the declining cash reserves and net income. A wait-and-see approach might be prudent before making new investments.

Financial Highlights

revenue
$880.1M
operating Margin
18.3%
total Assets
$4,602.1M
total Debt
$39.7M
net Income
$134.7M
eps
$4.24
cash Position
$92.7M
revenue Growth
-8.5%

Revenue Breakdown

SegmentRevenueGrowth
Ocean Transportation$718.3M-9.6%
Logistics$161.8M-0.9%

Key Numbers

Key Players & Entities

FAQ

What were Matson's total operating revenues for the third quarter of 2025?

Matson's total operating revenues for the three months ended September 30, 2025, were $880.1 million, a decrease from $962.0 million in the same period of 2024.

How did Matson's net income change in Q3 2025 compared to Q3 2024?

Matson's net income for the three months ended September 30, 2025, was $134.7 million, a significant decrease from $199.1 million reported in the third quarter of 2024.

What was Matson's diluted earnings per share for the nine months ended September 30, 2025?

For the nine months ended September 30, 2025, Matson's diluted earnings per share was $9.28, down from $10.13 in the corresponding period of 2024.

What were the primary drivers of the change in Matson's cash and cash equivalents?

Matson's cash and cash equivalents decreased from $266.8 million at December 31, 2024, to $92.7 million at September 30, 2025, primarily due to $141.7 million in vessel construction expenditures and $225.8 million in common stock repurchases.

How much income did Matson recognize from its investment in SSAT in Q3 2025?

Matson recognized $9.3 million in income from its 35 percent ownership interest in SSAT for the three months ended September 30, 2025, an increase from $6.9 million in the prior year's quarter.

What is Matson's ownership interest in SSA Terminals, LLC (SSAT)?

Matson holds a 35 percent ownership interest in SSA Terminals, LLC (SSAT), a joint venture providing terminal and stevedoring services on the U.S. West Coast.

What services does Matson's Logistics segment provide?

Matson's Logistics segment, operated through Matson Logistics, Inc., provides multimodal transportation brokerage, less-than-container load consolidation and freight forwarding, warehousing, and supply chain management services across North America and Asia.

Has Matson discontinued any services recently?

Yes, Matson discontinued its vessel management and related services in July 2024, which previously contributed to Ocean Transportation revenue.

What is the current number of Matson common shares outstanding?

As of September 30, 2025, the number of shares of Matson common stock outstanding was 31,180,035.

What were Matson's total operating costs for the nine months ended September 30, 2025?

Matson's total operating costs for the nine months ended September 30, 2025, were $1,942.6 million, an increase from $1,913.4 million in the same period of 2024.

Risk Factors

Industry Context

Matson operates in the highly competitive ocean transportation and logistics industry. Key trends include ongoing freight rate volatility, the impact of global economic conditions on trade volumes, and significant capital investment requirements for fleet modernization and expansion. The industry is also subject to evolving environmental regulations and geopolitical risks affecting trade routes.

Regulatory Implications

Matson operates under various maritime regulations, including those related to safety, environmental protection, and international trade. Changes in these regulations, such as stricter emissions standards or trade policy shifts, could impact operating costs and compliance requirements. The company's operations in specific trade lanes may also be subject to regional regulatory frameworks.

What Investors Should Do

  1. Monitor freight rate trends and demand in key trade lanes.
  2. Assess the sustainability of capital expenditures and share repurchases.
  3. Evaluate the impact of SSAT's performance on overall profitability.
  4. Analyze the company's liquidity and debt management.

Key Dates

Glossary

SSAT
Sea Shipping America, Inc., a joint venture in which Matson holds a significant ownership stake. (Income from SSAT is a notable contributor to Matson's overall income, showing an increase to $9.3 million in Q3 2025.)
Capital Construction Fund
A U.S. federal program allowing U.S. shipping companies to defer taxes on certain income used for vessel construction or acquisition. (Represents a significant asset balance ($627.9 million as of Sep 30, 2025), indicating long-term investment strategy.)
Deferred dry-docking costs
Costs associated with periodic maintenance and repair of vessels that are deferred and recognized over time. (An increase in these costs to $90.7 million suggests upcoming maintenance needs or a change in accounting for these expenses.)
Operating lease right of use assets
Assets recognized under accounting standards for leases where the company has the right to use an asset for a specified period. (Represents a significant portion of the company's assets ($355.7 million), reflecting leased equipment or facilities.)
Diluted Earnings Per Share
A measure of a company's profit allocated to each outstanding share of common stock, assuming all convertible securities and stock options were exercised. (Decreased to $4.24 from $5.89 in the prior year's quarter, reflecting lower profitability on a per-share basis.)

Year-Over-Year Comparison

Compared to the prior year, Matson, Inc. has experienced a significant downturn in financial performance. For the three months ended September 30, 2025, net income fell by 32.3% to $134.7 million, and total operating revenue decreased by 8.5% to $880.1 million. This trend is also evident in the nine-month period, with net income down 13.4% and revenue down 1.5%. Key risks highlighted include volatile freight rates, substantial capital expenditures for vessel construction, and a significant reduction in cash and cash equivalents, largely due to these investments and increased common stock repurchases.

Filing Stats: 4,503 words · 18 min read · ~15 pages · Grade level 7.7 · Accepted 2025-11-05 06:10:55

Filing Documents

—FINANCIAL INFORMATION

Part I—FINANCIAL INFORMATION 1 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) 1 Condensed Consolidated Statements of Income and Comprehensive Income 1 Condensed Consolidated Balance Sheets 2 Condensed Consolidated Statements of Cash Flows 3 Condensed Consolidated Statements of Shareholders' Equity 4 Notes to the Condensed Consolidated Financial Statements 5 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 28 Item 4.

Controls and Procedures

Controls and Procedures 28

—OTHER INFORMATION

Part II—OTHER INFORMATION 28 Item 1.

Legal Proceedings

Legal Proceedings 28 Item 1A.

Risk Factors

Risk Factors 28 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40 Item 3. Defaults Upon Senior Securities 40 Item 4. Mine Safety Disclosures 40 Item 5. Other Information 40 Item 6. Exhibits 41

Signatures

Signatures 42 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS MATSON, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per share amounts) 2025 2024 2025 2024 Operating Revenue: Ocean Transportation $ 718.3 $ 798.7 $ 2,031.3 $ 2,067.6 Logistics 161.8 163.3 461.3 463.9 Total Operating Revenue 880.1 962.0 2,492.6 2,531.5 Costs and Expenses: Operating costs ( 661.1 ) ( 654.3 ) ( 1,942.6 ) ( 1,913.4 ) Income from SSAT 9.3 6.9 23.2 8.5 General and administrative ( 67.3 ) ( 72.3 ) ( 217.1 ) ( 222.8 ) Total Costs and Expenses ( 719.1 ) ( 719.7 ) ( 2,136.5 ) ( 2,127.7 ) Operating Income 161.0 242.3 356.1 403.8 Interest income 7.6 10.4 25.0 38.0 Interest expense ( 1.8 ) ( 1.8 ) ( 5.2 ) ( 6.1 ) Other income (expense), net 2.1 1.9 6.9 5.5 Income before Taxes 168.9 252.8 382.8 441.2 Income taxes ( 34.2 ) ( 53.7 ) ( 81.1 ) ( 92.8 ) Net Income $ 134.7 $ 199.1 $ 301.7 $ 348.4 Comprehensive Income (Loss), Net of Income Taxes: Net Income $ 134.7 $ 199.1 $ 301.7 $ 348.4 Other Comprehensive Income (Loss): Net change in pension and post-retirement liabilities ( 0.7 ) ( 0.8 ) ( 2.4 ) ( 2.3 ) Other adjustments ( 1.6 ) 1.0 0.3 0.5 Total Other Comprehensive Income (Loss), Net of Income Taxes ( 2.3 ) 0.2 ( 2.1 ) ( 1.8 ) Total Comprehensive Income $ 132.4 $ 199.3 $ 299.6 $ 346.6 Basic Earnings Per Share $ 4.28 $ 5.98 $ 9.40 $ 10.28 Diluted Earnings Per Share $ 4.24 $ 5.89 $ 9.28 $ 10.13 Weighted Average Number of Shares Outstanding: Basic 31.5 33.3 32.1 33.9 Diluted 31.8 33.8 32.5 34.4 See Notes to Condensed Consolidated Financial Statements. 1 Table of Contents MATSON, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) September

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