Maersk shares jump after upbeat earnings guidance

COPENHAGEN Maersk on Wednesday issued full-year earnings guidance above its forecast at the beginning of the year, even as the shipping group expects demand for moving containers at sea to remain below normal levels in the third quarter.

The company’s share price jumped 7.4% in early trade to an eight-month high, and has doubled in value since March, as cost cuts and the prospect of a global economic recovery outweighed the present impact from the coronavirus pandemic.

Maersk, which handles one in every five containers shipped by sea worldwide, posted second-quarter revenue and earnings above expectations, as a sharp drop in volumes was partly offset by higher freight rates, lower fuel prices and lower costs.

“With a strong result and a strong balance sheet we are well positioned to financially and strategically come out stronger of the crisis,” Chief Executive Soren Skou said in a statement.

Maersk, which had in March suspended its earnings guidance because of coronavirus-related uncertainties, said it expected core earnings (EBITDA) of between $6 billion and $7 billion before restructuring and integration costs.

That compares with the $5.5 billion it forecast at the beginning of the year.

“Maersk has delivered an extraordinarily good report,” Alm. Brand Chief Equity Analyst Michael Friis Jorgensen said. “The market is refraining from competing on price, and internally Maersk has been phenomenal in adapting to the new situation by cutting costs.”

Global demand for containers is still forecast to decline this year compared with last year, with a mid-single digit contraction in the third quarter, Maersk said.

EBITDA rose 25% to $1.7 billion in the second quarter, above the $1.6 billion forecast by analysts in a Refinitiv poll. Revenue fell 7% to $9.0 billion versus the expected $8.9 billion.