Surprising Q2 Container Line Earnings Expected to Exceed Expectations

Surprising Q2 Container Line Earnings Expected to Exceed Expectations

The container lines won’t release their final numbers for the second quarter until next month, but early reports show that they have temporarily stopped the bleeding.

Matson is a specialty airline based in Hawaii. Late Thursday, the company revealed preliminary numbers that show it expects net profits for the second quarter of 2023 to be between $76.3 million and $81.5 million. Compared to the $34 million in net income for Q1 2023, this spread is more than twice as big.

CEO Matt Cox said that the number of people using Matson’s China service went up in the second quarter.

According to Stifel analyst Ben Nolan, the quarter was described as “remarkably good” and Matson earnings were “nearly double what we and the Street had expected.” We did not anticipate that.

Matson Company Inc. Shares Reach New 52-Week High Amid Industry Pessimism

Shares of Matson Company Inc. jumped to a new 52-week high of $94.28 early Friday before closing up 8% at $88.32. 

Shares of Matson have surged 41% year to date amid widespread pessimism about the fundamentals of the container transportation industry. After today’s gains, it is the best-performing U.S.-listed shipping stock in any vessel category, behind only Dorian LPG, owner of propane tankers.

Asian Ocean Companies Report Better Than Expected Q2 Results: Evergreen Marine Sales Up 1%

Even early news from Asian ocean companies points to a better second quarter than was expected.

Since the third quarter of 2022, quarterly sales have been going down for Evergreen Marine of Taiwan. But in the most recent reporting period, this drop finally stopped. In Q2 2023, sales were up 1% from Q1 2023. In Q2 2023, Evergreen’s sales were 43% higher than in the same quarter of 2019, before the outbreak.


Evergreen monthly operating revenues: 2019-2023


Cosco Reports Strong Q2 Results; OOCL Sales Rise Despite Challenges

The world’s fourth-largest shipping company, China’s Cosco, had a preliminary net income for Q2 2023 of 12.5 billion yuan ($1.7 billion), which is up 76% from the first quarter of this year.

Cosco owns OOCL, which made a number of unfavorable announcements: The results kept going down, but not as quickly as in earlier quarters and better than before COVID.

In the second quarter of 2023, OOCL made $1.98 billion in sales. That’s a 35% rise from the same time last year and a 26% rise from the same time this year. OOCL’s income dropped by 9% from the previous quarter, but it had dropped by much more (33% to 37%) in the two quarters before that.


OOCL quarterly revenue per FEU by trade lane


OOCL made an average of $2,126 per forty-foot equivalent unit in income during the last quarter. This is a 23% and 20% increase from the same time last year and the same time last year, respectively.

The Industry Outlook For The Second Half Of The Year Becomes Less Hopeful

On the other hand, people are becoming less hopeful about the second half.

Earlier this year, many airline executives thought that the inventory overflow would clear up and that restocking would happen at the same time as bookings before Christmas. This would make the second half of the year better than the first half.

This feeling has gotten worse.

Cox stated that the trade lane between China and the U.S. is anticipated to have a subdued peak season. However, he also mentioned that if there is no significant economic downturn in the U.S., there is an expectation for trade dynamics to gradually improve throughout the rest of the year.

Evergreen Marine Chairman Chang Yen-I stated at a Chinese shipowners’ conference that the traditional peak season in the third quarter appears to have been postponed, as reported by Chinese news outlet Xinder Marine News.

Israel-based On July 12, Zim cut its earnings estimates for the year by a lot. Zim CEO Eli Glickman stated that the second-quarter results are in line with expectations. However, there is no longer an expectation for an improvement in freight rates in the second half of 2023, as previously assumed, due to seasonality.

Zim now believes that demand will remain muted for the remainder of the year.

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Final Wording

Finally, the logistics sector might benefit from a quarterly earnings surprise from container lines. Lading Logistics gives you the latest trends in the Trucking industry every day. It also provides services such as freight forwarding, ocean, rail, road, air, and container shipping, as well as warehouse solutions, last-mile pickup and delivery, retail sales and distribution, trade automation services, and warehousing.