Maersk warns on profits amid Red Sea crisis

STORY: Maersk shares fell sharply on Thursday (February 8).

The Danish shipping giant's stock was down 13% in early trades after a new update spooked investors.

Maersk said Red Sea trade disruptions would not be a major boost for the company, even though the crisis has driven a surge in the prices to ship freight.

It also said an oversupply of vessels would hit its earnings this year.

The negative mood contrasted with recent optimism about the sector among investors.

Shipping companies have been some of the best performing stocks in Europe so far this year.

Firms have re-routed vessels following attacks on shipping by Houthi militants along the major Red Sea trading route, driving the gains in freight rates.

Maersk has diverted some vessels on a longer route around Africa.

But it expects underlying earnings of between $1 billion and $6 billion this year - well below the near $10 billion it scored last year.

Maersk further said it expected "significant oversupply challenges" in sea-going container shipping to emerge fully this year.

The warning led the company to suspend its share buyback program.

Maersk said it would review the decision once market conditions in ocean container shipping had settled.