European stock earnings "Black Thursday"? Maersk's profits halved, Volvo plummeted 14%, Vodafone's revenue fell short of expectations

European stock markets faced a "Black Thursday," as several industry giants released disappointing earnings reports, severely impacting market sentiment. From shipping and automotive to telecommunications, core companies not only underperformed but also issued pessimistic profit guidance, leading to a fierce sell-off of related stocks.

Global shipping giant A.P. Moller - Maersk saw its stock price plunge by 7% at one point, as the company warned that freight rates are facing deterioration with the gradual reopening of Red Sea routes. Maersk expects this year's profits to be halved compared to 2025, a forecast that is far below analysts' general expectations, directly triggering market concerns about the global trade environment.

The automotive and telecommunications sectors were similarly affected. Volvo's stock price plummeted by 14%, marking a dismal performance, as its fourth-quarter revenue fell short of expectations, with tariff pressures and fierce price wars severely eroding profit margins. Meanwhile, telecommunications giant Vodafone's stock fell by 4.6%, due to sluggish service revenue growth in its largest German market, indicating that the transformation plan implemented by the company's CEO still faces resistance.

Maersk's Profit Guidance Halved

According to Bloomberg, Maersk stated on Thursday that it expects this year's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to be between $4.5 billion and $7 billion. This figure is not only far below the $9.53 billion recorded in 2025 but also less than the analysts' average estimate of $5.76 billion.

Maersk pointed out that the downgrade in performance guidance is primarily based on the expectation of the gradual reopening of Red Sea routes. According to Global Times, previously, due to attacks by Houthi forces, the container shipping industry had to reroute around southern Africa, requiring additional transport time, which effectively reduced global capacity by about 7% to 8% amid fierce competition for cargo. However, with changes in the situation in the Red Sea, the freight bonus is fading.

In the face of a challenging market environment, Maersk announced it will focus on cost discipline. The company plans to cut 1,000 jobs, equivalent to 15% of its corporate functional roles, but accounting for less than 1% of the total workforce. The company expects annual cost savings to reach $180 million. Additionally, Maersk predicts this year's global container trade growth rate to be between 2% and 4%.

Industry consultancy Alphaliner's data shows that the total capacity of orders to be delivered by the world's top five container shipping companies in the coming years is nearly 7 million TEUs (Twenty-foot Equivalent Units), accounting for about 20% of the current global fleet, indicating that the supply side will face significant pressure.

Volvo's Profit Margin Under Pressure

Volvo experienced a difficult quarter, with its stock price plummeting by 14% after the earnings report was released. Affected by tariffs, increased discounting, and a stronger Swedish krona, the company's fourth-quarter profitability was severely dragged down, with an EBIT (Earnings Before Interest and Taxes) margin of only 2%, and operating revenue also fell short of analysts' expectations The company's CEO Hakan Samuelsson candidly stated in an interview with Bloomberg Television: "We are facing a very tough market." He pointed out that the cancellation of electric vehicle incentives in the United States is hindering sales. To cope with the EU's import tariffs on electric vehicle manufacturing, Volvo has had to adjust its production layout, shifting output to its plants in South Carolina and Belgium.

Despite disappointing performance last year, Volvo has set a goal to achieve higher sales and free cash flow by 2026. Samuelsson emphasized that new models, including the EX60, are at the core of its efforts to return to profitability. This electric SUV has received "very successful" initial orders and is seen as a new beginning for the company in the all-electric field.

Vodafone's Growth in the German Market Stalls

British telecom operator Vodafone reported that its organic service revenue growth for the third fiscal quarter fell short of expectations, leading to a decline in its stock price. According to Bloomberg data, the group's overall organic service revenue grew by 5.4%, below analysts' estimate of 6.03%.

In Vodafone's largest market, Germany, organic service revenue grew by only 0.7%, falling short of analysts' expectations of 1.02%. Although the introduction of 1&1 AG as a wholesale customer boosted sales, and the regulatory changes in Germany that banned housing associations from bundling TV packages have largely ended, fierce market competition continues to weigh on performance. Additionally, organic service revenue in the UK market saw a decline of 0.5%, far below the expected growth of 1.59%.

CEO Margherita Della Valle has been implementing an ambitious transformation plan for over two years, focusing on streamlining operations and asset divestitures, including the divestiture of businesses in Italy and Spain, as well as merging with Three, a subsidiary of CK Hutchison Holdings, in the UK domestic market. Although analysts have praised her strategy of focusing on a few key markets, the latest financial report shows that the road to recovery in core markets remains long.

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