Carnival Shares Jump Most in Decade on ‘Miracle’ Rebound
Carnival Jumps Most in Decade on ‘Miracle’ Rebound From Slump
(Bloomberg) -- Carnival Corp. jumped the most in a decade after earnings and its 2020 outlook topped expectations as the company made adjustments to mitigate effects from the weak European market.
Carnival, which is the largest cruise operator and has significant exposure to continental Europe, was able to meet the challenges in part through adjusting itineraries and effective marketing, Chief Executive Office Arnold Donald said on a conference call Friday. Fiscal fourth quarter adjusted earnings per share were 62 cents, topping the 50-cent average analyst estimate. The company projected 2020 net cruise revenue will increase 5%.
The stock soared as much as 9.8% in New York, its biggest intraday jump since June 2009. Shares of peers Royal Caribbean Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. also rallied. Carnival’s stock has been punished this year amid concerns about its exposure to European cruise consumers in weakening economies and the Trump administration’s ban on cruising to Cuba, a new market that operators had been betting on for growth.
Stifel analysts led by Steven Wieczynski said the report was a “Christmas miracle,” considering Carnival’s recent trajectory.
“Given how overwhelmingly negative sentiment around CCL shares has been for the past several quarters, we felt it would only require evidence of modest improvement to get the shares moving higher,” the analysts wrote, referring to Carnival by its ticker. They kept a buy recommendation on the stock.
The stock pared gains slightly after two of the company’s cruise ships collided in Cozumel, Mexico.
Carnival Glory struck Carnival Legend as Glory was pulling up to dock this morning. In an emailed statement, the company said it was reviewing damage but that the crash hadn’t affected the seaworthiness of the ships. One guest sustained a “minor injury” during an evacuation from the dining room.
Carnival said itineraries weren’t affected.
--With assistance from Janet Freund.
To contact the reporter on this story: Jonathan Levin in Miami at jlevin20@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Catherine Larkin, Richard Richtmyer
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