CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

Carnival shares set to fall as more cruises cancelled amid Covid-19

The cruise company has seen its share price come under renewed pressure after its Italian unit Costa opted to cancel the arrival of its ships for the 2020-21 season in South America due to the coronavirus pandemic.

  • Carnival shares under renewed pressure as Covid-19 leaves company rudderless
  • The cruise operator has seen earnings suffer in H1 and expects further losses in H2 2020
  • Outlook for Carnival remains uncertain as coronavirus cases surge once again
  • Carnival shares down 6% on Wednesday, with the stock down 70% year-to-date

Carnival has seen its share price come under renewed pressure this week, after its Italian unit Costa opted to cancel the arrival of its ships for the 2020-21 season in South America due to the coronavirus pandemic.

All cruises aboard the Costa Fascinosa, Costa Luminosa and Costa Pacifica in South America with embarkations scheduled from November 2020 to April 2021 were cancelled.

'Costa Cruises has been sailing in South America uninterrupted for 72 years and we are committed to continue operating here,' Dario Rustico, executive president of Costa Cruises for Central and South America, said.

'We look forward to resuming operations in the region in the 2021-2022 season with two ships.'

The news prompted the stock to plunge 6% on Wednesday, with it trading at £10.92 per share at the time of publication and down 70% year-to-date.

Carnival reports disappointing second quarter earnings amid Covid-19

Considering the myriad of challenges the cruise operator has faced due to the pandemic, it is no surprise that it reported a disappointing set of quarterly results in June this year.

Carnival recorded a second quarter (Q2) net loss of $2.4 billion, with total revenues for the quarter sitting at just $700 million, down from the $4.8 billion it reported during the same period a year prior.

The company's guest cruise operations have been on hold for the majority of the second quarter. In addition, the company is unable to definitively predict when it will return to normal operations. As a result, the company is currently unable to provide an earnings forecast.

However, the company did admit that it expects to suffer a net loss on both a US GAAP and adjusted basis for the second half of 2020.

‘In the face of the impact of the Covid-19 global pandemic, the company paused its guest cruise operations in mid-March,’ the company said.

‘In response to this unprecedented situation, the company acted to ensure the health and safety of guests and shipboard team members, optimize the pause in guest operations and maximize its liquidity position.’

Carnival cruises tied up until November

Las week, Carnival said that its ultra-luxury cruise brand Seabourn will put a stop to additional voyages for three ships in its fleet, with the company opting to hit the pause button amid the Covid-19 pandemic.

‘Our utmost priority is the health, safety and well-being of our guests, crew and the people in destinations,’ Seabourn president Josh Leibowitz said.

‘We recognise the long lead time for planning an ultra-luxury Seabourn experience and with that in mind, we proactively announce the cancellation of these additional voyages.’

‘We are working very closely with science and medical advisors as well as our source and destination markets to develop protocols for the ultimate return to operations,’ he added.

How to trade stocks with IG

Looking to trade Carnival and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Carnival PLC’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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