Have traditional ocean spot rates started to normalize, or have they generally held up for now?

Spot rates are at or near peak levels, with international ocean carriers successfully implementing August 1 rate increases. Carriers have managed capacity well, avoiding large backlogs or surplus. It's too early to predict what happens after early October. “the international ocean carriers had just put through another August 1 rate increase and some of that at least will stick, and the carriers are interested in trying to do what they can to keep rates up.”

What is the company's expectation for China trade policy over the next several months, specifically regarding the 1-year truce extension and port fees?

The company's outlook reflects an expectation of a stable trading environment, as both the U.S. and Chinese governments are believed to be interested in maintaining stability through the end of the year and into next year. “the U.S. and China's governments, we think, are both interested in creating a stable trade environment, and that will persist through the end of the year and into next year.”

How much of the stronger-than-expected pricing is due to fuel, and how much is due to the proven value of Matson's offering?

Joel Wine clarified that most of the recent pricing strength in transpacific is market-driven, not fuel-driven, with early Q2 rate actions having some fuel components. Matthew Cox added that the strength is also due to resilient international ocean markets globally, with carriers effectively managing capacity. Matson's premium rates are expected to continue until the end of peak season. “most of the early rate actions that we took that some fuel components to it was done early in the second quarter, the March, April time frame. And then the rest of the pricing environment since then has really been market driven, not fuel-driven.”

MATX

Matson (MATX) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 3, 2026

Source: earnings call transcript

Executive summary

Matson Q2 FY26 — Strong China Service Performance Drives Raised Full-Year Outlook

Matson delivered a strong Q2 FY26, primarily driven by robust demand and higher-than-expected freight rates in its China service, leading to a raised full-year outlook. The company is optimistic about continued strong consumer demand and a stable transpacific trading environment, while also navigating geopolitical uncertainties and expanding its Southeast Asia regional services.

Highlights

China service volume increased 15.2% year-over-year, with freight rates exceeding expectations.
Logistics operating income increased $0.5 million year-over-year to $14.9 million.
Generated $584.1 million in cash flow from operations over the trailing 12 months.
Returned $307.3 million to shareholders through dividends and share repurchases over the trailing 12 months.
Total debt reduced by $9.8 million from Q1, with $3.4 million shares remaining in repurchase authorization.

Concerns

Hawaii container volume decreased 1.1% year-over-year.
Alaska container volume decreased 2.3% year-over-year, primarily due to lower export seafood.
SSAT investment joint venture contribution decreased $2.5 million year-over-year to $4.8 million.
Under-collected fuel costs in the low teens of millions of dollars across all trade lanes by the end of Q2.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Consolidated Operating Income	higher than $499.8 million high materiality	FY26 · 2026	High
Full-year 2026 Ocean Transportation Operating Income	higher than $455.6 million high materiality	FY26 · 2026	High
Full-year 2026 Logistics Operating Income	higher than $44.2 million medium materiality	FY26 · 2026	High
Q3 2026 Ocean Transportation Operating Income	approximately 45% higher than $147.4 million high materiality	Q3 · 2026	High
Q3 2026 Logistics Operating Income	modestly higher than $13.6 million medium materiality	Q3 · 2026	Medium
Q3 2026 Consolidated Operating Income	approximately 45% higher than the prior year high materiality	Q3 · 2026	High
Q4 2026 Ocean Transportation Operating Income	modestly lower than $136 million high materiality	Q4 · 2026	Medium
Q4 2026 Logistics Operating Income	modestly higher than $7.7 million medium materiality	Q4 · 2026	Medium
Full-year 2026 Hawaii Container Volume	approach the level achieved in 2025 medium materiality	FY26 · 2026	Medium
Full-year 2026 China Service Volume	higher than the level in 2025 high materiality	FY26 · 2026	High
Full-year 2026 Guam Container Volume	comparable to the level achieved last year low materiality	FY26 · 2026	Medium
Full-year 2026 Alaska Container Volume	approach the level achieved last year medium materiality	FY26 · 2026	Medium
Full-year 2026 SSAT Contribution	lower than $32.5 million medium materiality	FY26 · 2026	High
Full-year 2026 Depreciation and Amortization	approximately $205 million low materiality	FY26 · 2026	High
Full-year 2026 Dry Docking Amortization	approximately $35 million low materiality	FY26 · 2026	High
Full-year 2026 Interest Income	approximately $18 million low materiality	FY26 · 2026	High
Full-year 2026 Interest Expense	approximately $6 million low materiality	FY26 · 2026	High
Full-year 2026 Other Income	approximately $7 million low materiality	FY26 · 2026	High
Full-year 2026 Effective Tax Rate	approximately 21.0% low materiality	FY26 · 2026	High
Full-year 2026 Dry-docking Payments	approximately $45 million low materiality	FY26 · 2026	High
Full-year 2026 Maintenance and Other Capital Expenditures	$150 million to $170 million medium materiality	FY26 · 2026	High
Full-year 2026 Vessel Construction Milestone Payments	$400 million high materiality	FY26 · 2026	High
Fuel Cost Recovery	recover elevated fuel costs by the end of the year medium materiality	FY26 · 2026	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Hawaii Container volume decreased primarily due to lower general demand. Economy stable, supported by strong construction and modest tourism, but faces headwinds from higher energy-related inflation.	—	-1.1%	—	—
China Container volume increased primarily due to significantly higher demand compared to prior year period, which saw a market decline due to tariffs. Momentum carried over from post Lunar New Year, with higher-than-expected freight rates and demand across e-commerce, garments, and e-goods.	—	+15.2%	—	—
Guam Container volume increased year-over-year. Economy expected to remain stable.	—	+4.4%	—	—
Alaska Container volume decreased primarily due to lower export seafood volume on AAX, partly offset by one additional northbound sailing. Economy expected to remain stable, supported by low unemployment, steady job market, and continued oil and gas exploration.	—	-2.3%	—	—
SSAT (Investment Joint Venture) Contribution decreased primarily due to lower lift volume and higher operating expenses. Year-over-year decrease: $2.5 million	—	—	—	$4.8 million
Logistics Operating income increased primarily due to higher contributions from freight forwarding and transportation brokerage, partially offset by a lower contribution from warehousing. Year-over-year increase: $0.5 million	—	—	—	$14.9 million

MATX operating KPIs by quarter

MATX operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Capital expenditures New vessel construction milestone payments	~$16M In the first quarter, we made a milestone payment of approximately $16 million from the CCF. Source: earnings call transcript	~$180M In the second quarter, we paid approximately $180 million in milestone payments from our capital construction fund. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Capital programs

Makua (Aloha Class vessel) underway

Spent to date: approximately 89% complete

Funding: Capital Construction Fund (CCF)

Benefit:additional capacity for CLX service, replacing smaller vessel for domestic trades

First of the new Aloha Class vessels. Delivery expected in the first quarter of 2027.

Malama (Aloha Class vessel) underway

Spent to date: approximately 64% complete

Funding: Capital Construction Fund (CCF)

Benefit:additional capacity for CLX service, replacing smaller vessel for domestic trades

Second of the new Aloha Class vessels. Delivery expected in the third quarter of 2027.

MacKenna (Aloha Class vessel) underway

Spent to date: approximately 30% complete

Funding: Capital Construction Fund (CCF)

Benefit:additional capacity for CLX service, replacing smaller vessel for domestic trades

Third of the new Aloha Class vessels. Delivery expected in the second quarter of 2028.

Risks & headwinds

Geopolitical uncertainty (Iran conflict, U.S. tariffs) current

Iran conflict has not impacted operating performance or service levels, but has impacted fuel prices. Under-collected fuel costs across all trade lanes by an amount in the low teens of millions of dollars.

Mitigation:Expect to recover elevated fuel costs by the end of the year. Business generally performs well when global supply chains are disrupted or become congested.

Higher energy-related inflation in Hawaii current

Hawaii's economy continues to face headwinds from higher energy-related inflation.

Mitigation:Construction remains a source of strength for Hawaii's economy, supported by large federal contracts, Maui wildfire rebuilding efforts and investments in infrastructure.

Lower lift volume and higher operating expenses at SSAT JV Q2 FY26

SSAT investment joint venture contributed $4.8 million, representing a year-over-year decrease of $2.5 million.

Mitigation:Full year 2026 SSAT contribution expected to be lower than $32.5 million achieved in 2025.

What to watch in Q3 FY26

Fuel cost recovery

by year-end

Current Under-collected low teens of millions of dollars

Target Recovered by year-end

Why it matters

Fuel costs impact profitability, and recovery is expected to normalize margins.

At the end of the second quarter, we had under-collected fuel costs across all trade lanes by an amount in the low teens of millions of dollars. We expect to recover these elevated fuel costs by the end of the year.

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Q&A highlights

Why is Q4 Ocean EBIT guided lower year-over-year, and is the current global trade strength expected to subside?

Management expects a return to traditional seasonality in Q4, with a normal falloff after peak season, despite strong consumer demand. The lower Q4 guidance is also due to a tough comparison from Q4 2025, which saw elevated demand post-US-China trade agreement.

“we're still projecting to see sort of a normal falloff, again, with the backdrop of strong consumer demand, the U.S. economy hanging in there. And so we expect to see some falloff as we get past peak and the largest amount of volume going through.”

asked by Jacob Lacks · answered by Matthew Cox

3 min read 6 chapters

Detailed narrative

China Service Strength and Outlook

Matson's China service demonstrated significant momentum in Q2 FY26, with container volume increasing 15.2% year-over-year and freight rates exceeding expectations. This performance was driven by tight market conditions, strong demand across e-commerce, garments, and e-goods, and some pull-forward of seasonal goods due to general rate increases, higher fuel surcharges, and geopolitical uncertainties.

The company anticipates the China service to operate at or near capacity through the peak season, with full-year volume expected to be higher than 2025 levels, supported by continued solid U.S. consumer demand.

Southeast Asia Expansion and Diversification

The company continues to expand its regional services across Vietnam, Thailand, and the broader Southeast Asia region, which now accounts for 20% to 25% of the China service volume, a significant increase from early 2025. This expansion is a strategic priority, enabling Matson to diversify its cargo mix and capture market share by offering a fast and reliable premium service.

While all-in rates from these origins are slightly lower than direct China cargo, the company is highly satisfied with the resulting yield and market presence.

Domestic Trade Lane Performance

In Q2 FY26, Hawaii container volume decreased 1.1% year-over-year due to lower general demand, though the economy remains stable, supported by strong construction activity and modest tourism growth. Alaska container volume decreased 2.3% year-over-year, primarily due to lower export seafood, despite a stable economy.

Guam's container volume increased 4.4% year-over-year, with its economy expected to remain stable, and full-year volume projected to be comparable to last year.

Logistics and SSAT Contributions

Matson's Logistics segment reported an operating income of $14.9 million in Q2 FY26, a $0.5 million increase year-over-year, driven by higher contributions from freight forwarding and transportation brokerage. Conversely, the SSAT investment joint venture contributed $4.8 million, representing a $2.5 million decrease year-over-year, primarily due to lower lift volume and higher operating expenses.

The full-year 2026 contribution from SSAT is expected to be lower than the $32.5 million achieved in 2025.

Capital Allocation and Balance Sheet Strength

The company generated strong cash flows, with $584.1 million from operations over the trailing 12 months, exceeding aggregate spend on maintenance CapEx, dividends, and share repurchases by $143.4 million. Matson returned $307.3 million to shareholders in the form of dividends and share repurchases over the same period, including repurchasing 0.3 million shares for $67.8 million in Q2.

Total debt stood at $341.3 million, a $9.8 million reduction from Q1, and the Capital Construction Fund balance of $346 million covers approximately 90% of remaining new vessel milestone payments.

New Vessel Construction Progress

The construction of the new Aloha Class vessels is progressing on schedule. The first vessel, Makua, is approximately 89% complete with delivery expected in Q1 2027. The second vessel, Malama, is approximately 64% complete, with delivery anticipated in Q3 2027.

The third vessel, MacKenna, is approximately 30% complete, with delivery expected in Q2 2028. These larger vessels are expected to provide additional capacity, particularly for peak seasons, and contribute incrementally to profitability due to similar operating costs but higher capacity.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.