Maersk Q3 Profits Surge — And Q4 Looks Even Better
On Feb. 20, in the early days of the COVID crisis, passengers were disembarking an infected Princess cruise ship in Japan. Residents of Wuhan, China, were in total lockdown. The very first case was diagnosed in Italy. Also on that day, container giant A.P. Moller-Maersk (OTC: AMKBY) released its 2019 annual report and 2020 guidance.
That guidance turned out to be very wrong.
Back in February, Maersk projected full-year 2020 earnings before interest, tax, depreciation and amortization (EBITDA) of $5.5 billion. Now, its guidance is for $8 billion-$8.5 billion, 45-55% higher than that it first thought. Amid a global pandemic that has already killed over 1.3 million people, Maersk’s EBITDA is on track to rise 40-49% year-on-year.
On Wednesday, Maersk reported its single best quarter since it transformed from a conglomerate in 2016. Net income rose 82% year-on-year. And according to Maersk CEO Søren Skou, the container market is getting even better.
“The tailwinds from rates and volumes are accelerating into the fourth quarter,” Skou said during the conference call with analysts.
“We now expect to deliver a Q4 that is stronger than Q3. This is unusual and not our normal seasonality, and it has enabled us to upgrade our expectations for the full year.”