Shares of Miami-based Carnival dropped after the cruise company announced a gloomier-than-expected forecast Monday.
The company’s shares tumbled nearly 10% following an announcement by Carnival CEO Arnold Donald on a quarterly conference call that rising fuel prices and currency headwinds would cause full-year earnings outlook to miss expected high water marks.
Shares ultimately closed down 7.85% Monday after the cruise giant adjusted its projections down from $4.20 to $4.40 per share down to a range of $4.15 to $4.25 per share.
During a strong second quarter, Carnival saw shares rise 78 cents per share to hit a $561 million quarterly profit. But the cruise operator’s third-quarter profit projections of $2.25 to $2.29 per share are a disappointment on The Street, where expectations had been $2.48 per share. On the call, Donald stressed that, “We continue to have strong operating performance despite the impact of fueling currency,” according to CNBC.
Carnival’s stock slip caused competitors to also dip, with Norwegian Cruise Line shares down 6.1% and Royal Caribbean shares falling 4.6%.
Despite today’s choppy seas, the cruise industry has seen a lot of buoyed interest recently, including Royal Caribbean’s billion-dollar majority stake buy to form a new industry partnership focused on high-end expeditions. And earlier this month, Ritz-Carlton raised anchor on its own line of luxury cruises.