Cruise titan Carnival Corp. reported a second-quarter loss of US$4.4 billion, including US$2 billion in impairment charges, and warned that it can’t predict when it will be able to resume operations given the lingering coronavirus shutdown.

• The world’s largest cruise company said its adjusted net loss for the period ended May 31, excluding the charges, was US$3.30 a share. That’s far deeper than analysts’ expectation of a US$1.95 loss. Revenue was just US$700 million, a plunge from the year-earlier US$4.8 billion. Carnival’s shares skidded in early trading.

Key Insights

• While rival Norwegian Cruise Line Holdings Ltd. this week extended its cruising suspension through the end of September, Carnival said it couldn’t provide a resumption target at all. Norwegian’s announcement slammed the brakes on what had been a remarkable recovery for cruise stocks, and Carnival’s further downbeat news is likely to extend the losses.
• Carnival is working to downsize its fleet, expecting a long, phased return to cruising when it eventually comes. The Miami-based company said it has preliminary agreements to dispose of six ships and is the process of concluding more such deals.
• Like other cruise operators, Carnival has taken steps to shore up its cash and debt positions in an effort to weather the pause. The company said it has a total of US$7.6 billion in available liquidity and faces US$250 million a month in operating and administrative expenses.

Market Reaction

• Carnival shares fell as much as 6.8 per cent to US$17.80 in New York trading Thursday. The stock was down 62 per cent this year through Wednesday’s close.