Carnival Slashes Full-Year Profit Outlook by 11% to $2.21/Share on Soaring Fuel Costs
CCL sits 67% above its 52-week low of $15.07 on light trading volume (0.2× avg).
Summary
Carnival Corp. has significantly cut its full-year adjusted earnings outlook to $2.21 per share from a prior forecast of $2.48 per share, primarily attributing the downgrade to a material increase in its fuel expense outlook from $1.63 billion to $2.15 billion. The company also provided second-quarter adjusted earnings guidance of 34 cents per share, falling short of analyst expectations. While Carnival reported a beat on first-quarter adjusted earnings and revenue, and noted strong demand and onboard spending, the forward-looking profit warning due to rising operational costs is a material negative for future profitability expectations. This news presents a mixed financial picture for the company, coming on the same day as it announced a substantial $2.5 billion share buyback program. Traders will closely watch crude oil prices and the company's ability to mitigate these cost pressures through pricing strategies and continued strong demand.
At the time of this announcement, CCL was trading at $25.15 on NYSE in the Trade & Services sector, with a market capitalization of approximately $34.8B. The 52-week trading range was $15.07 to $34.03. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.