U.S. Carrier Matson Warns of Challenging Trade Environment Ahead

Matson’s stock falls 15% after the company reported Transpacific container volumes falling 30% since April in response to tariffs.

Matson, Inc. (NYSE: MATX), a leading U.S. carrier in the Pacific, reported significant year-over-year growth in its first quarter 2025 results, with net income doubling to $72.3 million compared to $36.1 million in the same period last year.

The company’s strong performance was primarily driven by its China service, which benefited from elevated freight rates carried over from the fourth quarter of 2024. Matt Cox, Matson’s Chairman and Chief Executive Officer, noted that the results aligned with expectations, highlighting healthy freight demand following the traditional post-Lunar New Year period.

In domestic operations, Matson saw mixed results across its regional services. Hawaii container volume increased by 3.2% year-over-year, primarily due to a competitor’s vessel dry-docking. Alaska showed positive growth with a 4.8% increase in container volume, driven by higher northbound volume. However, Guam experienced a significant decline of 14.3% in container volume, attributed to lower demand from retail and food and beverage segments.

Despite the strong first-quarter performance, Matson’s outlook for the remainder of 2025 reflects growing concerns about global trade conditions. The company has already observed a “pronounced market decline in demand” in container volume since new tariffs were implemented by the Trump Administration in April, including a 145% tariff on China. The company reported an approximately 30% year-over-year decrease in Transpacific volumes.

Cox addressed these challenges head-on, citing “significant uncertainty regarding tariffs and global trade, regulatory measures, the trajectory of the U.S. economy and other geopolitical factors.” The company expects Ocean Transportation operating income in the second quarter of 2025 to be meaningfully lower than the same period in 2024.

Matson’s stock price declined more than 15% on Tuesday.

On the financial front, Matson maintains a strong balance sheet with $122.0 million in cash and cash equivalents as of March 31, 2025. The company also holds $685.4 million in cash and investments in fixed-rate U.S. Treasuries in its Capital Construction Fund.

Despite the challenging outlook, Cox expressed confidence in Matson’s long-term prospects.

“Despite the current uncertainties, we remain confident in our long-term prospects due to the diversification of our businesses and cash flows, our focus on serving niche markets where we are an integral part of the supply chain, and the strength of our balance sheet… Matson’s businesses have historically performed well during periods of supply chain disruption given our competitive advantages and the reliability of our services,” Cox said.

The company expects significant capital expenditures in 2025, including approximately $305 million for new vessel construction and $40 million for dry-docking payments. Additionally, Matson’s board of directors has declared a cash dividend of $0.34 per share, payable on June 5, 2025.

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