Image source: Getty Images.

What happened

Shares of shipping company Matson, Inc. (NYSE:MATX) fell as much as 30.6% Tuesday after reporting third-quarter earnings. As of 3:35 p.m. EST shares had recovered some of those losses but were still down 17.7% on the day.

So what

Quarterly revenue fell 8.1% to $500.4 million and net income dropped 39.8% to $25 million, or $0.58 per share. Lower volumes, particularly in Hawaii and Alaska, were blamed for the weak results, and next quarter doesn't look much better.

Management said that ocean transportation operating income is expected to fall 15% in the fourth quarter from $43.6 million a year ago.

Now what

There are macro economic factors driving lower demand like a slow food harvest in Alaska, and those factors will continue to pressure results. The challenge is there's little management can do to stop the bleeding.

With earnings on the decline and shares trading at 14 times trailing earnings, the stock looks expensive. Until macro demand picks up, this is a stock to watch from the sideline.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.