Shipping Giant Maersk Launches $5 Billion Share Buyback After Record Quarter. The Stock Is Surging.

Shipping Giant Maersk Launches $5 Billion Share Buyback After Record Quarter. The Stock Is Surging.

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A.P. Moeller-Maersk



stock jumped more than 5% on Wednesday, as the Danish shipping giant launched a $5 billion share buyback program after record profits in the first quarter.

The company said its “exceptionally strong” performance in the first three months of 2021 was driven by strong demand and surging freight rates. Global demand has soared in recent months as the economic recovery from the Covid-19 crisis has gathered pace.

Freight rates were driven up in the first quarter by bottlenecks, lack of capacity and equipment shortage in the global supply chain, Maersk Chief Executive Søren Skou said in a statement.

He expected the current dynamics to last into the fourth quarter, justifying its guidance, which was upgraded last week, and paving the way for further buybacks.

Maersk announced plans on Wednesday to accelerate the remaining $1.1 billion in its current buyback program, to now be completed by September, before launching an additional program worth Danish krone 31 billion ($5 billion) over two years.

Read:Maersk Boosts Profits as Global Demand Surges

The shipping giant, seen as a bellwether for the global economy, said revenue increased by 30% to