Please ensure Javascript is enabled for purposes of website accessibility

Carnival to Post Net Loss for Fiscal 2020

By Eric Volkman - Updated Mar 17, 2020 at 7:55AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cruise ship operator might be vying for "most obvious guidance" of the coronavirus period.

To the surprise of very few investors and industry observers at this point, Carnival (CCL -2.48%) (CUK -2.71%) reports that it will post a net loss for its current fiscal 2020.

In an update for investors published on Monday, the troubled cruise ship operator said that was due to the cessation of its operations because of the outbreak of the SARS-CoV-2 coronavirus and resulting COVID-19 disease. Like many businesses throughout the world, Carnival temporarily halted its operations in the face of the pandemic. This will result in the anticipated net loss; the company did not provide an estimate for this shortfall.

In the press release announcing it, Carnival sought to reassure investors by saying that it is "taking additional actions to improve its liquidity, including capital expenditure and expense reductions, and pursuing additional financing."

A Carnival ship in port in Nagasaki, Japan.

Image source: Carnival.

One of those actions is a draw-down of $3 billion from a multi-currency revolving credit facility the company and a clutch of its subsidiaries entered into last August. This, however, means it has now drawn fully from the facility. The funds will be utilized for "working capital, general corporate or other purposes," according to Carnival.

The company is a major player in the cruise ship business. It controls a host of brands in the sector, including Princess, Cunard, and Holland America Line in addition to its eponymous brand. All are struggling significantly due to the near-cessation of global travel activity.

Both share classes of Carnival stock have been plummeting, more so than many top stocks. On Monday, Carnival/CCL dropped by 17% on the day, while Carnival/CUK declined by almost 22%. 

 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Carnival Corporation Stock Quote
Carnival Corporation
CCL
$8.65 (-2.48%) $0.22
Carnival Corporation Stock Quote
Carnival Corporation
CUK
$7.90 (-2.71%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.