Why Zim Integrated Shipping Services Inched Higher Today

Zim Integrated Shipping Services ( ZIM 0.86% ) reported a better-than-expected third quarter on Wednesday, and news of the company's performance pushed its share price marginally higher. Double-digit gains during the trading session moderated toward the close, but the stock ended the day with a nearly 1% increase.

That compared favorably to the flat line that was the S&P 500 ( ^GSPC 0.40% ) . A very memorable quarter It was a beat-and-raise quarter for Zim, which saw its revenue more than double year over year.



It landed at $2.77 billion, against the $1.27 billion of third quarter 2023.

This was on the back of a 12% rise in carried volume, and a powerful 177% improvement in the logistics company's average freight rate. The change on the bottom line was even more dramatic, with Zim flipping hard into a net profit of $1.13 billion ($9.

34 per share) from the $2.27 billion loss in the year-ago period. The company also declared its upcoming dividend.

This will consist of a regular payout of $2.81 per share, combined with a $0.84 special dividend, for a total of $3.

65 per share. This is to be dispensed on Dec. 9 to investors of record as of Dec.

2. Management attributed the vast improvements in fundamentals to the addition of newer, larger ships to the company's fleet. Zim has also benefited from a general rise in demand for ocean shipping, its specialty.

Guidance raised On the back of those vastly improved fundamentals, Zim raised its earnings before interest, taxes, depreciation, and amortization ( EBITDA ) guidance for both its current (fourth) quarter and the full year. For the latter period, it anticipates that non-GAAP (generally accepted accounting principles) adjusted EBITDA will come in between $3.3 billion and $3.

6 billion. It wasn't immediately clear why investors cooled on Zim after that early-share price pop on Wednesday. They might be concerned, sensibly, that the future of ocean shipping generally is somewhat murky, given the state of conflicts in certain hot spots -- such as the Israeli company's home region of the Middle East.

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