Carnival shares fall on ballooning costs, dragging cruise stocks lower

Carnival Cruise Line’s new ship Mardi Gras docked in Port Canaveral, Florida on July 30, 2021.

Joe Burbank | Orlando Sentinel | Tribune News Service | Getty Images

Carnival shares fell below their pandemic lows on Friday after the cruise line reported third-quarter earnings that revealed higher costs associated with inflation, supply chain disruptions and maintaining safety protocols and health

Carnival shares were down about 20% in the afternoon. Shares fell to a 52-week low of $7.01 earlier in the session, below the lows of the stock’s pandemic fall in April 2020, when shares traded around $7.80 intraday

If Friday’s losses hold, it would shave nearly $3 billion off Carnival’s market value. Shares of Norwegian and Royal Caribbean also fell on Friday, down 14% and 11%, respectively.

Carnival reported an adjusted net loss of $770 million, or 65 cents per share, on $4.3 billion in revenue. Operating costs and expenses totaled $3.4 billion in the quarter, compared to costs of $1.6 billion in the third quarter of 2021.

Carnival said bookings improved 15 percentage points from the previous quarter to 84%. This compares to 54% employment during the same period in 2021. Despite governments relaxing pandemic-era protocols in both the U.S. and, more recently, Canada, the company expects fourth-quarter bookings below 2019 levels at lower prices.

Cruise lines around the world are struggling with massive debts taken on during the Covid lockdowns, made more expensive by rising interest rates. On Friday morning, Carnival reported $1 billion in principal payments so far through 2022 and a total of $9 billion due in 2025.

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