Carnival Stock Plummets Toward A 30-Year Trough As Losses, And Revenue Shortfalls Continue To Mount

carnival stock

The cruise operator (Carnival stock) reported a loss that was far larger than anticipated, as well as revenue that was significantly lower than projections.

Even though capacity utilization increased to 92%, shares of Carnival Corporation (NYSE:CCL) dropped to a new post-pandemic low on Friday as the cruise operator disclosed yet another loss that was bigger than projected and revenues that were below expectations.

During the afternoon session of trading on April 2, 2020, the share price of CCL fell by 20.5%, becoming it the most significant faller in the S&P 500 index SPX. This caused it to drop below the previous post-pandemic closing low of $7.97. It seemed like it was going to close at a level not seen since October 1992.

Carnival Stock Price Decline

The net loss that Carnival (NYSE:CCL) recorded for the fiscal third quarter that ended on August 31 was reduced to $770 million, or 65 cents per share, compared to a loss of $2.84 billion, or $2.50 per share, for the same time a year ago.

The average loss per share, according to the FactSet consensus, was 11 cents.

The number of available lower berth days (ALBD) grew to represent 92% of the total fleet capacity from 17%, which resulted in the overall income increased by a factor of almost eight, from $546 million to $4.31 billion. This change caused the ALBD to represent 92% of the whole fleet capacity. Despite this gain, overall sales came in much below the average estimate of $4.90 billion for revenue provided by FactSet.

While income from passenger tickets surged nearly nine-fold to $2.60 billion, it fell short of the FactSet consensus estimate of $3.10 billion. Meanwhile, revenue from onboard and other sources increased seven-fold to $1.71 billion, but it fell short of the estimate of $1.81 billion.

Since the fiscal second quarter of 2020 came to a close in May, the firm has now declared a loss for each and every quarter since then, with the losses being more than predicted in all but one of those quarters. The revenue has now fallen short of projections for ten consecutive quarters.

According to Chief Executive Josh Weinstein, “We are continuing to reduce the gap to 2019 as we continue through the year,” the company is boosting occupancy on increased capacity while also lowering unit costs.

Because of future cruise credits (FCCs), the company reported that cumulative advance bookings for the fourth quarter are below the historical range at lower prices. On the other hand, the business indicated that total advance reservations for 2023 are marginally higher than the usual range at rates that are “considerably higher.”

The number of ALBDs reached 21 million during the third quarter, and it is anticipated that the number will rise to 22 million during the fourth quarter. The number of ALBDs reached 3.8 million during the third quarter of the previous year.

The amount of cash and equivalents held by Carnival (NYSE:CCL) declined from $8.94 billion the previous year to $7.07 billion, while the cash flow from operations number was just $344 million. This is in contrast to the figure of $879 million that was recorded the previous year.

Shares of other cruise operators, such as Norwegian Cruise Line Holdings Ltd. NCLH and Royal Caribbean Group RCL, experienced collateral damage as a result of the wake left by Carnival (NYSE:CCL) . On Friday afternoon trading, both companies’ shares fell by 11.4% and 15.3%, respectively.

Although the S&P 500 index was down 23.7% so far in 2018, the price of a Carnival stock is down 63.8%, shares of Norwegian Cruise are down 43.4%, and shares of Royal Caribbean are down 49.7%.



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About the author: Valerie Ablang is a freelance writer with a background in scientific research and an interest in stock market analysis. She previously worked as an article writer for various industrial niches. Aside from being a writer, she is also a professional chemist, wife, and mother to her son. She loves to spend her free time watching movies and learning creative design.