Home >News >world >Cruise titan Carnival reports $4.4 billion loss, can’t predict return to sea
Philippine Coast Guard personnel ride on a patrol boat heading to the Carnival Spirit cruise ship docked at Manila Bay's anchorage, amidst the global spread of the coronavirus disease (COVID-19). (REUTERS)
Philippine Coast Guard personnel ride on a patrol boat heading to the Carnival Spirit cruise ship docked at Manila Bay's anchorage, amidst the global spread of the coronavirus disease (COVID-19). (REUTERS)

Cruise titan Carnival reports $4.4 billion loss, can’t predict return to sea

  • Carnival is working to downsize its fleet, expecting a long, phased return to cruising when it eventually comes
  • The world’s largest cruise company said its adjusted net loss for the period ended May 31, excluding the charges, was $3.30 a share

Cruise titan Carnival Corp. reported a second-quarter loss of $4.4 billion, including $2 billion in impairment charges, and warned that it can’t predict when it will be able to resume operations given the lingering coronavirus shutdown.

  • The world’s largest cruise company said its adjusted net loss for the period ended May 31, excluding the charges, was $3.30 a share. That’s far deeper than analysts’ expectation of a $1.95 loss. Revenue was just $700 million, a plunge from the year-earlier $4.8 billion. Carnival’s shares skidded in early trading.

Key Insights

  • While rival Norwegian Cruise Line Holdings Ltd. this week extended its cruising suspension through the end of September, Carnival said it couldn’t provide a resumption target at all. Norwegian’s announcement slammed the brakes on what had been a remarkable recovery for cruise stocks, and Carnival’s further downbeat news is likely to extend the losses.
  • Carnival is working to downsize its fleet, expecting a long, phased return to cruising when it eventually comes. The Miami-based company said it has preliminary agreements to dispose of six ships and is the process of concluding more such deals.
  • Like other cruise operators, Carnival has taken steps to shore up its cash and debt positions in an effort to weather the pause. The company said it has a total of $7.6 billion in available liquidity and faces $250 million a month in operating and administrative expenses.

Market Reaction

  • Carnival shares were down 6.5% to $17.85 in premarket trading at 7:36 a.m. in New York. The stock was down 62% this year through Wednesday’s close.

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