Cruise titan Carnival Corp reported a second-quarter loss of US$4.4 billion, including US$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 US$3.30 a share. That’s far deeper than analysts’ expectation of a US$1.95 loss. Revenue was just US$700 million, a plunge from the year-earlier US$4.8 billion. Carnival’s shares skidded in early trading.
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 in 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 US$7.6 billion in available liquidity and faces US$250 million a month in operating and administrative expenses.
Carnival shares fell as much as 6.8 per cent to US$17.80 in New York trading Thursday. The stock was down 62 per cent this year through Wednesday’s close.