Cruise NewsCarnival (CCL) Stock Takes Hit On Earnings

Carnival (CCL) Stock Takes Hit On Earnings

Carnival Corp. dropped over 7% (closing at $34.54 –$2.86) ($CCL) today on extremely heavy volume after Q3 results missed on revenue and earnings.  It is no secret the struggle that Carnival has had in 2013 after a tough 2012 with the Costa Concordia disaster.

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The impact that the Carnival Triumph incident had on Carnival is now clear.  Images of cruise ships with non working toilets and no air conditioning that are plastered all over the news networks and the internet have scared cruisers into sailing with other lines.

Carnival has started many new programs in the past few months to try and rebuild their company brand.  Last night on primetime, Carnival ran a one minute commercial during “How I Met Your Mother” and “The Voice”.

Two weeks ago, Carnival gave out free cruises to travel agents so they can experience what Carnival has to offer.  The free cruises were so popular that they “sold out” within minutes.  Carnival is hoping that travel agents will steer their clients towards Carnival after the experience they had cruising with them.  Carnival also recently began offering travel agent rates for agents so they can cruise with them at a discounted price.

Carnival has also slashed prices on cruises across the board.  Bookings for the next 3 quarters are below last year’s pace.  They expect revenue to drop 3% in 2013.

However, it is not all doom and gloom with Carnival.  The world’s largest cruise line is investing more than $300 million to their current fleet of 24 cruise ships.  They are adding backup generators and improving fire safety to help prevent any further incidents like on the Triumph and Splendor.

They have also recently announced the order of a new 135,000 gross ton ship, the Carnival Vista.  The ship is scheduled to be launched in the winter of 2016 and will feature the 2.0 enhancements that many of their current ships are being upgraded too.

The combination of new cruise ships, less problems due to ship enhancements, and more travel agents promoting Carnival to their clients should help Carnival get back on track.

Carnival Corp. is the parent company of Aida, Carnival, Costa, Cunard, Holland America, Ibero, P&O, Princess, and Seabourn Cruise Line.

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Ben Souza
Ben Souza
Ben is a world traveler who has visited 40+ countries, taken over 70 cruises. He is one of USA TODAY's experts for their 10Best Readers' Choice Awards. His writings have appeared and been cited in various media outlets such as Yahoo News, MSN, NPR, CNN, Fox, and ABC News. Ben currently resides in Cincinnati, Ohio. Follow Ben on Instagram. Visit Ben Souza on Linkedin. You may email Ben at [email protected].
Cruise NewsCarnival (CCL) Stock Takes Hit On Earnings

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