Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Maersk warned about too many ships.
Instead, the bigger problem turned out to be too few ways to move containers once they hit land. That's good news for profits, at least for now. Bad news for anyone hoping global trade would suddenly become smooth.
Moller-Maersk reported a strong second quarter and raised full-year guidance for the second time this year. Revenue rose 20% year on year to $15.8 billion, while operating profit almost doubled to about $1.6 billion, well ahead of analyst expectations of roughly $700 million. Net profit rose to $1.26 billion from $586 million a year earlier.
Maersk now expects full-year underlying EBIT of $4.5 billion to $6.5 billion, up from its previous $2 billion to $4 billion range. It also lifted underlying EBITDA guidance to $10.5 billion to $12.5 billion from $8 billion to $10 billion. Shares rose as much as 9% as investors welcomed the upgrade.
The company said demand remained resilient, with global container market volume expected to grow about 4% this year. Growth was especially strong from the Far East, helped by exports from China and stronger flows into Africa, North America and Latin America. Higher spot rates also helped, driven by tight capacity, unbalanced trade flows and congestion in Europe, the Middle East, the east coast of South America and West Africa.
CEO Vincent Clerc said the bigger issue is no longer simply ship capacity. It is ports, rail, trucks, barges and inland infrastructure struggling to move containers to their final destination. Maersk is having the kind of problem shipping companies secretly like: demand is strong, routes are messy and bottlenecks are pushing up rates.
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