Tax Reform Benefits Expeditors, Matson in 4Q
Expeditors International of Washington Inc. and Matson Inc. reported fourth-quarter and full-year 2017 results with both seeing boosts from the U.S. Tax Cuts and Jobs Act implemented in December.
Air and ocean freight logistics firm Expeditors had quarterly net earnings of $167 million, or 92 cents a share, as revenue increased 16% to $1.9 billion. In the fourth quarter a year ago, Expeditors reported net earnings of $111 million, or 61 cents, on revenue of $1.6 billion.
Seattle-based Expeditors recognized a $39 million net income tax benefit in the quarter due to the tax reform.
Musser
Expeditors operates 177 district offices and several branch offices on six continents, and its three major units are airfreight, ocean freight and customs brokerage. The airfreight group recorded revenue of $854.5 million, up 25% from the same period a year ago. Ocean freight revenue rose more than 3% to $521.3 million, and customs revenue came in at $525.6 million, up 17%.
“The global freight industry is stronger than it was a year ago, particularly in certain key lanes and especially for shipments by air,” CEO Jeffrey Musser said.
For the full-year, Expeditors reported net earnings rose nearly 14% to $489.3 million, or $2.69, on revenue of $6.9 billion. In 2016, net earnings were $430.8 million, $2.36, on revenue of $6.1 billion.
The air unit had revenue of $2.9 billion, a 17% increase from 2016, while ocean rose about 10% to $2.1 billion, and customs finished up 12% at $1.9 billion.
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Separately, Honolulu-based ocean cargo shipper Matson reported fourth-quarter net income of $166.9 million, or $3.90, compared with net income of $20 million, or 46 cents, in the fourth quarter a year ago. Earnings this year benefited from a $155 million, or $3.62, windfall from tax reform.
Matson provides carrier services among Hawaii, Alaska, Guam, Micronesia and select South Pacific islands, and operates a premium expedited service from China to Southern California.
Revenue in the fourth quarter slipped to $516.1 million from $519.3 million a year ago.
Revenue for the ocean transportation division fell 4% to $390 million, and income fell nearly 37% to $21 million. Matson said its container volume fell year-over-year due to an extra week in 2016 and lower construction-related volumes. Container volume fell with China 14.3%, by nearly 28% with Guam and by 10% with Alaska.
Cox
The logistics division saw income of $4.6 million, flat compared with the same year-ago period. Revenue rose 11.5% to $126.2 million.
For the full-year, Matson had net income of $232 million, or $5.37, compared with $81.4 million, or $1.87, in 2016. The full-year results also reflect the benefit of $155 million, or $3.62, from the tax reform. Revenue for the year was $2 billion, up from $1.9 billion in 2016.
Ocean transportation revenue rose 2% to $1.6 billion, while logistics rose almost 19% to $475.1 million.
“Overall, 2017 was a solid year for Matson,” CEO Matt Cox said. “For 2018, we expect to face continued competitive pressure in Guam and modestly lower volume in China. As a result, we expect Matson’s 2018 operating income to approximate the level achieved in 2017.”
