Leading stocks in the cruise sector were falling for a second day Monday after Carnival Corp delivered worse-than-expected earnings amid fears of economic frailty in China and across the world.
New York-listed Carnival’s shares fell 23.2% to $7.03 per share on Friday after the world’s largest cruise provider posted a $0.65 loss per share for the third quarter, versus analyst expectations of $0.13 loss per share.
The shares then slid to $6.68 per share within the first few minutes of Monday’s trading day, registering their lowest point in 30 years.
They stood at $6.91 per share in late morning trading on Monday.
New York-listed stocks for Royal Caribbean Group and Norwegian Cruise Line Holdings also fell on the heels of Carnival’s disappointing results, at a time when global-recession fears and China’s struggling economy weigh on investors’ heads.
Shares of Carnival, which has 95 ships, most likely fell, however, as a result of its own misgivings in an industry that is still clawing itself back from a near-fatal pandemic, an analyst said.
“I think that Carnival’s problems are unique to carnival based on its size and very diverse fleet of older ships,” Tigress Financial Partner’s Ivan Feinseth told TradeWinds.
Jason Liberty-led Royal Caribbean’s shares dropped 13.2% on Friday to close at $37.90. They then fell to a nine-year low of $37.11 shortly after Monday’s opening bell, before making their way up to $38.42 per share in late morning trading.
Shares of Frank Del Rio-led Norwegian slid 18% on Friday to to close at $11.36. It then dropped in late morning trading on Monday.
Shares of Norwegian, which has 28 ships and will drop its Covid-19 requirements on Tuesday, still have a market advantage over those held by the two other US-based cruise majors for numerous reasons, Feinseth said.
“I still believe that Norwegian is in the best position based on fleet with the youngest and most fuel-efficient ships as well as the most feature-rich ships and in the best position with a schedule to add more ships over the next seven years,” he said.
“Norwegian still has strong pricing trends and demand.”
Feinseth said that shares of Royal Caribbean, which has 62 ships, come in second in terms of share outlook, thus putting Carnival at the bottom of the short roster.
But the stock performance of any one of the Big Three cruise ship owners can influence the other two.
“Unfortunately, as they say a rising tide lifts all ships, a waning tide also brings them all down,” he said.
