Daily Brief: Maersk Is Easing Companies’ Nerves In These Unsettling Times

Daily Brief: Maersk Is Easing Companies’ Nerves In These Unsettling Times

over 2 years ago3 mins

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Maersk – the world’s biggest shipping group – reported better-than-expected earnings on Tuesday, holding its nerve even as logistical dread keeps the world’s firms up at night.

What does this mean?

It turns out it’s difficult to run a port when there are outbreaks of a contagious disease that bring operations to a standstill, or when there are so few people to hire that ships just sit there waiting to be unloaded. But that’s exactly what’s been happening at docks around the world, leading shipping rates to triple in the last year as companies pay a premium to guarantee their products get where they need to be. That’s Maersk’s time to shine: the company reported a 68% uptick in revenue last quarter versus the same time last year, and on-board investors sent its stock up 3%.

2020
Maersk income Q3 2020... | Source: The Wall Street Journal
2021
... vs. Maersk income Q3 2021 | Source: The Wall Street Journal

Why should I care?

The bigger picture: Maersk wants to rule the waves and skies.

Maersk isn’t resting on its laurels, mind you: the company announced on Tuesday that it’s investing more than $1 billion in its air delivery business, both by buying German air freight specialist Senator International and by adding more planes to its fleet. It’s hoping that’ll allow it to attract new customers and give existing ones more options, which should only spell good things for its bottom line moving forward.

Zooming out: Good news for Maersk is good news for us all.

Maersk also upped its outlook for the year, with the company now expecting container demand to grow by as much as 9% this year and keep going into next. Consider that reassuring: the firm handles a fifth of all containers shipped around the world, making it a bellwether for global trade and the broader global economy. In other words, if Maersk’s doing big business, the rest of the world probably is too.

Freight rates

Keep reading for our next story...

Vaccine Sales Helped Pfizer’s Quarterly Earnings Beat Expectations

Pfizer image

Pfizer reported better-than-expected results on Tuesday, and the pharma giant’s kid-friendly vaccination campaign should only help keep that going.

What does this mean?

Pfizer’s had stiff competition throughout the pandemic in the form of Moderna, AstraZeneca, and Johnson & Johnson, but lately it’s managed not to succumb to any of the supply chain side effects that have afflicted its vaccine rivals. It’s also not been responsible for as many regular old side effects, making it the top choice for wary vaccine-takers everywhere. That’s put the company in prime position to increase its market share in the US and Europe, which it’s done by 18% and 10% respectively since April.

That might be why revenue from Pfizer’s vaccine – which makes up nearly 55% of the firm’s total – came in better than expected last quarter, and why it beat overall revenue expectations too. The company’s feeling so healthy, in fact, that it upped its full-year forecast for vaccine sales to $36 billion – more than double the $15 billion it predicted back in February.

Vaccine forecast

Why should I care?

The bigger picture: The sooner everyone’s vaccinated, the better.

Pfizer’s expecting next year to be big for vaccine sales too, especially as it expands global distribution and provides both doses for kids and boosters for the already vaccinated. The company also said it’d be upping supply to lower-income regions – including Africa, where only 6% of the population is vaccinated – going forward, which is essential if the global economy is ever going to start firing on all cylinders again.

For you personally: There are other ways to profit from vaccines.

Pfizer’s stock is up 34% in the last year, so you’re probably too late if you were hoping to benefit from the success of its vaccine. But it’s not the only way you can profit from the ongoing demand: every business involved in the vaccination process stands to benefit, from the chemical manufacturers that mass produce the doses to the transport companies that get them wherever they need to be.

Pfizer stock
Source: Google Finance
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