What happened
International cargo shipping stock ZIM Integrated Shipping Services (ZIM -0.43%) is facing rough seas to start the week. The company reported first-quarter 2023 financial results before the market opened this morning, and investors are showing their disapproval.
As of 11:14 a.m. ET, shares of ZIM are down 14.2%.
So what
Representing a year-over-year decrease of 63%, ZIM reported Q1 2023 revenue of $1.37 billion. Besides the startling decline in performance compared to the same period last year, ZIM's inability to meet analysts' expectations also upset investors. The company's reported sales failed to meet analysts' estimate of $1.57 billion.
Investors found an even greater source of concern at the bottom of the income statement. Whereas it reported earnings per share of $14.19 in Q1 2022, the company reported a loss per share of $0.50 in Q1 2023. Addressing the quarterly results, Eli Glickman, the company's president and CEO, stated the company's financial performance "reflected the significant decline in freight rates and weak demand, particularly in the Transpacific trade, that began last year."
With regards to 2023, ZIM reaffirmed its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast of $1.8 billion to $2.2 billion. Should the company achieve the midpoint of this guidance, it will represent a 73% decrease over the $7.5 billion in adjusted EBITDA that it reported in 2022.
Now what
With the end of Q1 2023, ZIM's balance sheet isn't as strong as it had been, showing a net debt position of $381 million. For context, the company had a net cash position of $279 million at the same time last year. In light of the company's inauspicious view for the remainder of 2023, investors will want to monitor the company's balance sheet to see if its financial health worsens.
