Shares of cruise operators took a hit as Carnival Corporation announced that increasing fuel prices are putting pressure on the company’s profits. In response, the stock price of Carnival fell nearly 7% to $13.46, while Royal Caribbean and Norwegian Cruise Line also experienced dips of 3% and 4% respectively.
During a conference call with analysts, Carnival’s Chief Executive, Josh Weinstein, explained the current situation: “While we’ve seen fuel prices fluctuate in the past, there has only been one other period in the last 15 years where our fuel costs have reached this level.” Weinstein noted that currency fluctuations are also contributing to the earnings challenges.
To combat these rising costs, Carnival is diligently working on fuel reduction measures. The company aims to enhance fleet efficiency and optimize voyage routes to decrease fuel consumption.
Although higher sales have partially offset the impact of increased fuel prices, Carnival anticipates another 20% rise in fuel costs for the current quarter. As a result, the company is projecting an adjusted loss of 10 cents to 18 cents per share for the fourth quarter. This outlook differs slightly from the loss of 11 cents per share expected by analysts.