Shares of Carnival Corp. (CCL, Financial) sank over 2% on Thursday on the back of the cruise operator’s net loss for the quarter ending in May.
The Miami-based company reported a net loss of $4.37 billion, or $6.07 per diluted share, compared with net income of $451 million, or 65 cents in earnings per share, in the prior-year quarter. Revenue of $0.7 billion sank from prior-year quarter sales of $4.8 billion as the coronavirus outbreak shut down guest cruise operations for the majority of March through May 2020.
Company updates business position as coronavirus cases accelerate
Carnival said that due to the uncertainty regarding its return to normal operations, the operator of cruise ships like Carnival Cruises, Holland America and Princess Cruises is unable to provide an earnings forecast for the remainder of the fiscal year. Despite this, Carnival expects to have a net loss for the second half of the year as the coronavirus continues to impact operations. According to Johns Hopkins University statistics, Covid-19 cases surpassed 8.36 million around the globe with over 2.16 million cases in the U.S.
GuruFocus ranks Carnival’s profitability 7 out of 10 on the heels of operating margins increasing approximately 5.30% per year on average over the past five years and outperforming over 72% of global competitors. Despite this, the company warned that longer pauses in guest operations could lead to higher impacts on the company’s financial position.
Gurus with large holdings in Carnival include PRIMECAP Management (Trades, Portfolio) and John Rogers (Trades, Portfolio)’ Ariel Investments.
Carnival and rival cruise companies announce retiring of ships and further cancellations
Carnival announced it has plans to retire six ships in the next 90 days and is currently working toward additional agreements. Additionally, rival cruise company Norwegian Cruise Line Holdings Inc. (NCLH, Financial) announced on Tuesday that the company has suspended sailings to October per travel and port restrictions related to the coronavirus.
Disclosure: No positions.
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