Maersk said Red Sea trade disruptions would not be a major boost for the company and an oversupply of vessels would hit its earnings this year.
The warning, which also led the Danish group to suspend its share buyback programme, is in stark contrast with investors' recent optimism about the sector.
Shipping companies have been among the best performing stocks in Europe so far in 2024 as the re-routing of vessels following attacks on shipping by Iranian-backed Houthi militants in the Red Sea – a major trading route – boosted freight rates.
Maersk, which like other shippers has been diverting some vessels on a longer route around Africa, said it expected underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of between $1 billion and $6 billion this year, compared with the $9.6 billion achieved last year.
Analysts in an LSEG poll are on average forecasting Maersk, which is viewed as a barometer of world trade, to post EBITDA of $6.6 billion this year.
'Significant Oversupply Challenges'
The company said it expected 'significant oversupply challenges' in sea-going container shipping to materialise fully during 2024. Pandemic-related bottlenecks that boosted profits among shipping companies in 2022 resulted in a wave of new vessel orders.
'High uncertainty remains around the duration and degree of the Red Sea disruption with the duration from one quarter to full year reflected in the guidance range,' the company added in a statement.
CEO Vincent Clerc said those disruptions in no way resembled what happened to container shipping during the pandemic and would not be a major boost for the company.
Sydbank analyst Mikkel Emil Jensen called the financial report 'weak' and said the company's guidance indicated a net loss for 2024.
Maersk's shares dropped 12% at the open, while those of rival Hapag-Lloyd fell around 10%.
Maersk said EBITDA dropped to $839 million in the fourth quarter from $6.54 billion a year earlier, lagging analysts' expectations of $1.13 billion.
The company also suspended its share buyback programme and said it would review the decision once market conditions in ocean container shipping had settled.
The shipping giant also announced plans to spin off its towage and marine services activities and plans to list the new company on the Nasdaq Copenhagen stock exchange.
Maersk has sought to streamline its business in recent years, spinning off oil rigs and other units that did not fit with its core shipping and logistics operations.
The anticipated first day of trading for the shares of the new company, to be called Svitzer Group, is on 30 April, Maersk noted.
"It comes as part of their strategy to adapt the business to be pure logistics and transport. There isn't much drama about that," Sydbank analyst Mikkel Emil Jensen told Reuters.
Last year, the new unit generated revenue of $839 million and earnings before interest, tax, depreciation and amortisation of $246 million.