The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Matson (NYSE: MATX) and the rest of the marine transportation stocks fared in Q1.
The growth of e-commerce and global trade continues to drive demand for shipping services, presenting opportunities for marine transportation companies. While ocean freight is more fuel efficient and therefore cheaper than its air and ground counterparts, it results in slower delivery times, presenting a trade off. To improve transit speeds, the industry continues to invest in digitization to optimize fleets and routes. However, marine transportation companies are still at the whim of economic cycles. Consumer spending, for example, can greatly impact the demand for these companies’ offerings while fuel costs can influence profit margins. Geopolitical tensions can also affect access to trade routes, and if certain countries are banned from using passageways like the Panama Canal, costs can spiral out of control.
The 5 marine transportation stocks we track reported a satisfactory Q1. As a group, revenues missed analysts’ consensus estimates by 1%.
In light of this news, share prices of the companies have held steady as they are up 4.6% on average since the latest earnings results.
Weakest Q1: Matson (NYSE: MATX)
Founded by a Swedish orphan, Matson (NYSE: MATX) is a provider of ocean transportation and logistics services.
Matson reported revenues of $782 million, up 8.3% year on year. This print fell short of analysts’ expectations by 4.4%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income and sales volume estimates.
Matt Cox, Matson's Chairman and Chief Executive Officer, commented, "Our first quarter financial performance was as expected with significantly higher year-over-year consolidated operating income. The year-over-year increase was primarily driven by our China service, which benefitted from the carryover of elevated freight rates from the fourth quarter of 2024 combined with healthy freight demand following a traditional post-Lunar New Year period. For our domestic tradelanes, we saw higher year-over-year volume in Hawaii and Alaska and lower year-over-year volume in Guam. In Logistics, our operating income was lower year-over-year primarily due to a lower contribution from freight forwarding and transportation brokerage, partially offset by a higher contribution from supply chain management."
Matson delivered the weakest performance against analyst estimates of the whole group. The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $109.19.
Read our full report on Matson here, it’s free.
Best Q1: Scorpio Tankers (NYSE: STNG)
Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.
Scorpio Tankers reported revenues of $204.2 million, down 47.6% year on year, outperforming analysts’ expectations by 1.7%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 6.2% since reporting. It currently trades at $40.05.
Is now the time to buy Scorpio Tankers? Access our full analysis of the earnings results here, it’s free.
Kirby (NYSE: KEX)
Transporting goods along all U.S. coasts, Kirby (NYSE: KEX) provides inland and coastal marine transportation services.
Kirby reported revenues of $785.7 million, down 2.8% year on year, falling short of analysts’ expectations by 2.7%. It was a slower quarter as it posted adjusted operating income in line with analysts’ estimates.
Interestingly, the stock is up 11.6% since the results and currently trades at $107.39.
Read our full analysis of Kirby’s results here.
Pangaea (NASDAQ: PANL)
Established in 1996, Pangaea Logistics (NASDAQ: PANL) specializes in global logistics and transportation services, focusing on the shipment of dry bulk cargoes.
Pangaea reported revenues of $122.8 million, up 17.2% year on year. This result missed analysts’ expectations by 4.4%. Aside from that, it was a strong quarter as it recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Pangaea scored the fastest revenue growth among its peers. The stock is up 7.3% since reporting and currently trades at $4.75.
Read our full, actionable report on Pangaea here, it’s free.
Genco (NYSE: GNK)
Headquartered in NYC, Genco (NYSE: GNK) is a shipping company that transports dry bulk cargo along worldwide maritime routes.
Genco reported revenues of $44.35 million, down 43.9% year on year. This print topped analysts’ expectations by 4.8%. Overall, it was a strong quarter as it also put up a decent beat of analysts’ adjusted operating income estimates.
Genco pulled off the biggest analyst estimates beat among its peers. The stock is down 1.4% since reporting and currently trades at $13.27.
Read our full, actionable report on Genco here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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