Container shipping rise bodes well for world trade
COPENHAGEN • A.P. Moller-Maersk, a shipping company that investors monitor as a bellwether for world trade, lifted Tuesday its full-year earnings outlook after reporting that its second-quarter profits nearly tripled.
The Danish group said earnings were boosted by higher freight volumes, a positive sign for global growth even as China's economic activity is slowing and Europe's is stagnant.
CEO Nils S. Andersen noted the results were "achieved in challenging markets" and helped by cost cuts and a profit on the sale of a majority stake in the company's retail business.
Net profit jumped to $2.3 billion in the three-month period that ended June 30, from $856 million in the year-earlier period. Revenues rose to $12 billion from $11 billion a year earlier.
The Copenhagen-based group said it expects results for 2014 to be "significantly above" the 2013 results of $3.8 billion. When not counting one-time gains or charges, it expects profit to be $4.5 billion, up from expectations of $4 billion.
Amid the improving results, the company decided to launch a structured share buy-back program of up to 5.6 billion kroner ($1 billion) to be carried out over a 12-month period.
Shares in Maersk jumped nearly 5 percent in early trading in Copenhagen to 13,590 kroner.
In June, Maersk saw a plan to create an alliance of the world's three biggest container shipping operators blocked by Chinese authorities. U.S. and European authorities had okayed an independently operated network with 255 vessels to start in late 2014.