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.
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.
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.