European stocks earnings report "Black Thursday"? Maersk profits halved, Volvo plunged 14%, Vodafone revenue below expectations

European stock markets experienced a "Black Thursday", as a flurry of disappointing earnings reports from major industry giants severely hit market sentiment. From shipping and automobiles to the telecom sector, core companies not only failed to meet expectations, but also issued pessimistic profit guidance, leading to a sharp sell-off in related company shares.

Global shipping giant Maersk's share price plunged as much as 7%. The company warned that as the Red Sea route gradually reopens, freight rates are facing deterioration. Maersk expects its profit this year to be cut by half compared to 2025, a guidance far below analysts' consensus, which directly sparked concerns about the global trade environment.

The automobile and telecom sectors were not spared either. Volvo stock plummeted 14%, marking a dismal performance, as its fourth-quarter revenue missed expectations and tariffs coupled with fierce price wars severely eroded its profit margins. Meanwhile, telecom giant Vodafone's stock fell 4.6% due to sluggish service revenue growth in its largest market, Germany, indicating that the company's CEO's transformation plan is still facing significant obstacles.

Maersk Profit Guidance Cut in Half

According to Bloomberg, Maersk said in a statement on Thursday that it expects its EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) this year 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 analysts’ average estimate of $5.76 billion.

Maersk pointed out that the downward revision of its guidance is mainly based on the expectation that the Red Sea route will gradually reopen. According to Global Times, previously, container shipping had to reroute via southern Africa owing to attacks by the Houthis, requiring extra transportation time, which, amid fierce competition for cargo sources, effectively cut about 7% to 8% of global shipping capacity. However, as the Red Sea situation changes, the freight rate premium is fading.

Facing a severe market environment, Maersk announced it would 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 total employees. The company expects annual cost savings to reach $180 million. In addition, Maersk forecasts global container trade growth this year to be 2% to 4%.

Industry consultancy Alphaliner's data show that the world's top five container shipping companies have nearly 7 million TEUs of order capacity due for delivery in the next few years, accounting for about 20% of the current global fleet, signaling massive pressure on the supply side.

Volvo's Profit Margins Under Pressure

Volvo had a tough quarter, with its share price tumbling 14% after the earnings release. Impacted by tariffs, expanded discounts, and Swedish krona appreciation, the company's profitability in the fourth quarter was severely weakened, with EBIT margin at only 2%, and operating revenue also falling short of analyst expectations.

Chief Executive Hakan Samuelsson told Bloomberg TV: “We are facing a very tough market.” He noted that the elimination of electric vehicle incentives in the United States has been hampering sales. To cope with the tariffs imposed by the EU on imported electric vehicles, Volvo has had to adjust its production layout, shifting output to factories in South Carolina and Belgium.

Despite disappointing results last year, Volvo has still set goals to achieve higher sales and free cash flow by 2026. Samuelsson stressed that new models including the EX60 are central to the company’s turnaround efforts. This electric SUV has already received “very successful” initial orders and is seen as a fresh start in the all-electric segment.

Vodafone's German Market Growth Stalls

UK telecom operator Vodafone reported third-quarter organic service revenue growth that missed expectations, dragging down its share price. According to Bloomberg data, group organic service revenue growth was 5.4%, lower than analysts’ estimate of 6.03%.

In Vodafone's largest market, Germany, organic service revenue grew only 0.7%, below analysts’ forecast of 1.02%. Although the company brought in 1&1 AG as a wholesale customer to boost sales, and the regulatory change ending the bundling of TV packages by German housing associations had generally played out, intense market competition still weighed on results. Additionally, the UK market saw a 0.5% decline in organic service revenue, much lower than the expected growth of 1.59%.

CEO Margherita Della Valle has pursued an ambitious transformation plan for over two years, focusing on streamlining operations and asset disposals, including divesting its businesses in Italy and Spain, and merging with CK Hutchison’s Three in the domestic UK market. Even though analysts have praised the strategy of focusing on a handful of key markets, the latest earnings report shows that the road to recovery in core markets remains long.

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