Why Matson Shares Moved Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of ocean transportation and logistics company Matson (NYSE: MATX  ) climbed 10% today after its quarterly results and guidance topped Wall Street expectations.

So what: Matson shares have slumped in recent months on concerns over its exposure to the weak global economy, but a strong third quarter -- EPS of $0.45 on revenue of $401.4 million versus $0.21 and $380.6 million in the year-ago period -- suggests that those worries are overblown. While rising dry-docking expenses weighed on margins, continued volume and rate strength in China and strong Guam volume are giving investors plenty of good vibes over its growth going forward.

Now what: Thanks to those demand tailwinds, management expects its fourth-quarter Ocean Transportation operating income to grow significantly over 2011 and possibly even double. "Our balance sheet strength and strong cash flow generation support a strong dividend while providing ample capacity for future investments in our people, our businesses and new markets," CEO Matt Cox said in a statement. With management backing up that statement by also reducing its debt load by $44 million during the quarter, conservative income-oriented Fools might want to take a closer look.

Interested in more info on Matson? Add it to your watchlist.


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