Maersk Shares Slide on Lower Earnings Outlook

By Dominic Chopping

Shares in A.P. Moller-Maersk fell Thursday as the Danish shipping giant said earnings will drop sharply this year while it announced 1,000 job cuts as part of plans to save around $180 million annually.

Shares fell over 8% at the European open before paring some losses to trade 5% lower.

The company warned that it expects industry overcapacity this year as the Red Sea gradually opens, which will pressure freight rates.

Container-shipping operators have spent more than two years avoiding the Red Sea region after Houthi militants in Yemen began attacking ships traversing the area following the October 2023 attack by Hamas on Israel and subsequent military action by Israel in Gaza. But vessels are slowly starting to re-enter the area following an October ceasefire.

Maersk has resumed limited sailings through the Suez Canal. Along with Hapag-Lloyd, its partner in the Gemini vessel-sharing pact, it has decided to start from mid-February a route that connects India and the Middle East with the Mediterranean Sea and transits through the Red Sea and Suez Canal area. The service will be secured by military assistance, the companies have said.

As sailing resumes through the Red Sea, journeys between Asia and Europe will become shorter, freeing up vessels that until now have been stuck on longer routes to avoid the area. This, coupled with softer demand, is expected to create overcapacity and continue weighing on freight rates.

Overcapacity pushed average freight rates 23% lower across all shipping routes in the fourth quarter, driving a $153 million earnings loss at the company's main shipping business.

Volumes grew by 8% but operating costs only rose by 1.6%, mainly driven by Gemini-related efficiencies.

Maersk said global container-volume growth is seen at between 2% and 4% this year and it expects to grow in line with the market, which is better than the 2.5% consensus growth forecast.

However, the company said it still needs to cut costs this year.

"To drive continuous productivity improvements and maintain strong cost discipline, Maersk has announced steps to simplify the organization and reduce the company's corporate overhead," it said.

As part of these improvements the company said around 15% of its 6,000 corporate positions will be cut this year to reduce costs across regions, countries and its headquarters.

Maersk targets between $4.5 billion and $7 billion in underlying earnings before interest, taxes, depreciation and amortization this year compared with $9.57 billion in 2025.

Underlying earnings before interest and taxes are expected at between $1 billion and minus $1.5 billion compared with $3.36 billion in 2025.

"Management's comments on the need for cost-cutting highlights the fragility of the outlook," analysts at JPMorgan said in a note to clients.

Its fourth-quarter revenue slipped to $13.33 billion from $14.59 billion a year earlier, while Ebitda fell 49% to $1.84 billion and EBIT fell 94% to $118 million.

A FactSet poll of analysts had expected revenue at $12.87 billion, Ebitda at $1.84 billion and EBIT at $210 million.

Maersk will pay a dividend of 480 Danish kroner ($75.90) a share, down from the 1,120 kroner it paid a year earlier. It said it will initiate a share buyback program of up to $1 billion.

The company added that it will reorganize its logistics-and-services business to better cater to customers and distinguish between differences across logistics products. The unit will be regrouped into three subsegments of landside, forwarding, and solutions.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

February 05, 2026 05:03 ET (10:03 GMT)

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