A.P. Moller-Maersk A/S (MAERSK-B.KO) Wednesday poured some cold water on the prospects for the global shipping industry in the second half of the year with an earnings outlook that fell well short of investors' expectations despite a surprise improvement in the Danish energy and transport group's first-quarter net profit.

The less bullish-than-expected outlook from the world's biggest operator of container ships triggered a 6% drop in its stock price, wiping $1.4 billion off its market capitalization on the Copenhagen bourse.

The group's net profit attributable to shareholders rose 1.2% to DKK6.15 billion ($1.05 billion) overshooting market expectations mainly due to a one-time gain of DKK5.05 billion from the settlement of a tax dispute relating to Maersk's Algeria oil production. Revenue increased 2.7% to DKK81.25 billion, helped by a higher oil price which benefited Maersk's oil and gas unit.

However, the bullish tone to Maersk executives' comments about the group's outlook after Maersk Line pushed through large rate increases in the first quarter contrasted with their forecast for only a modest improvement in the shipping unit's performance this year, well short of analysts' expectations.

Considering Maersk Line has 16% of the global container-shipping market with much of its 630-strong fleet plying routes between Europe and Asia, Maersk's cautious outlook gels with growing worries about the impact of the euro-zone's enduring sovereign debt crisis, and Greece's possible exit from the currency area, and a hard landing for the Chinese economy on global trade.

Peter Sand, chief analyst at international shipping association Bimco, said renewed macro-economic uncertainty in Europe following Greece's inconclusive elections 10 days ago and fresh indications that Chinese growth could be slowing are putting some downward pressure on freight rates.

"The long-term perspective (for higher rates) is unchanged, but the short-term expectation of a recovery have been pushed a little further ahead than it was a month ago," Sand said.

Maersk said Wednesday it expects global demand for seaborne containers to increase 4%-6% during 2012, but the rate of demand growth will be lower at its key Asia-Europe trade lane, which contributes about 40% of Maersk Line's revenue. Bimco forecasts capacity will rise by 11% this year in its latest industry survey.

Maersk said Wednesday that container demand may rise only 4-6% this year against an earlier forecast that industry , hence the squeeze on the rates shippers can charge customers.

Maersk said Wednesday it won't be able to match last year's net profit of DKK18.08 billion this year. Analysts were expecting a full-year net profit of DKK24 billion.

"Today's results were not easy to interpret, but the market had clearly expected a more substantial increase in the full-year guidance, and in that sense the share price reaction is fully understandable," said Jacob Pedersen, an analyst at Denmark's Sydbank.

Maersk Chief Executive Nils Smedegaard Andersen said Maersk Line is now more likely to break even this year than remain in the red as he had expected before the rate increases. "So far, it looks like the rate increases are being well absorbed by the market," Smedegaard Andersen said in an interview.

Still, Maersk Line swung dramatically into the red in the quarter. The unit, made a first-quarter loss of DKK3.4 billion, compared with a year-earlier profit of DKK2.32 billion.

The performance and outlook at Maersk Line was "a major disappointment," said Jyske Bank analyst Martin Munk.

Maersk shares were down 5.8% at DKK38,000 around 1345 GMT valuing the group at DKK167.03 billion.

-By Flemming Emil Hansen and Jens Hansegaard, Copenhagen Bureau, Dow Jones Newswires; +45 33 12 44 88; flemming.hansen@dowjones.com

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