Carnival shares fall on balloon costs, pushing cruise line stocks down

Carnival shares tumbled below their post-pandemic low on Friday after the cruise line released a third-quarter earnings report that revealed higher costs related to inflation, supply chain disruptions and adherence to health and safety protocols.

Carnival shares fell 23% in the session. Shares closed at a new 52-week low of $7.03, below the low of the April 2020 pandemic drop, when shares traded near $7.80 intraday.

Friday’s losses slashed Carnival’s market value by about $2.5 billion. Shares of Norwegian and Royal Caribbean also fell on Friday, dropping 18% and 13% respectively.

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

Carnival said bookings increased 15 percentage points from the previous quarter to 84%. This compares to 54% occupancy for the same period in 2021. Despite easing pandemic-era protocols by governments in both the US and, more recently, Canada, the company forecasts fourth-quarter orders to be below 2019 levels — at lower prices.

Cruise lines around the world are grappling with huge debts taken on during the Covid lockdown, made more expensive by rising interest rates. Carnival on Friday morning reported $1 billion in principal payments for 2022 and a total of $9 billion by 2025.