Key Takeaways
- Carnival shares sank on Monday after the company's current quarter profit outlook missed expectations.
- The cruise line operator said a slower-than-expected drop in inflation will raise costs.
- Carnival's sales in the second quarter hit a record high, and its loss was below estimates.
Carnival (CCL) was the worst-performing stock in the S&P 500 on Monday as shares dropped 7.6% after the cruise line’s current quarter profit outlook missed expectations. Shares of rivals Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean (RCL) lost ground as well.
Carnival expects fiscal 2023 third quarter earnings per share (EPS) in a range of $0.70 to $0.77. Analysts had been looking for a profit of $0.76.
CFO David Bernstein said that a slower-than-anticipated decline in inflation for port operations, freight, and crew travel caused the firm to raise its outlook for expenses.
That came as the cruise line reported record second quarter revenue of $4.91 billion, and a loss of $0.32. Both were better than estimates.
CEO Josh Weinstein said Carnival benefited from higher ticket prices, “even while maintaining record onboard spending levels, building occupancy, and growing capacity.”
Despite Monday's selloff, Carnival shares were up more than 75% year-to-date.