Carnival shares dropped Monday after the company cut its full-year guidance, citing increased fuel costs and unfavorable currency exchange rates.
Shares were down as much as 10 percent after the cruise line operator cut its full-year earnings outlook to a range between $4.15 and $4.25 from a range between $4.20 and $4.40 earnings. The Miami-based company said it expects rising fuel prices and currency headwinds will lower its full-year earnings per share by 19 cents.
The stock was down 7.6 percent at $58.74 per share as of 12:50 p.m. in New York. That was it’s biggest decline since a 7.9 percent drop in February 2016.
CEO Arnold Donald said in the quarterly conference call that, despite the forecast cut, “we continue to have strong operating performance despite the impact of fueling currency.”
“Essentially, strength and underlying demand for our cruise offerings plus greater ticket prices year-to-date … more than offset the unfavorable impact of fuel and currency for the full year compared to our December guidance,” Donald said.
The company also expects its third-quarter profit to range from $2.25 to $2.29 per share, well below a Thomson Reuters estimate of $2.47.
Carnival also reported adjusted earnings for fiscal second quarter beat estimates at 68 cents per share, above the Reuters estimated 60 cents. Revenue for the quarter was $4.4 billion versus the expected $4.32 billion, fed by booking volumes at above levels from the prior year.
The company’s stock was already under pressure prior to Monday’s drop, having fallen 4.3 percent this year through Friday’s close.
Source: Investment Cnbc
Carnival shares plunge the most in 2 years after slashing full-year forecast