Carnival said on Tuesday it was almost sold out in the first half of 2024 after booking volumes since November reached all-time highs, but its stock fell slightly as the cruise line operator revealed it was making profits from rerouting ships to avoid attacks in the Red Sea.
Carnival expects an impact of 7 cents to 8 cents a share to its 2024 adjusted earnings due to redirection around the Red Sea conflict, which involves Iran-backed Houthi rebels firing on ships in response to Israeli military action in Gaza against Hamas. The conflict has prompted ships of all types, including tankers, to avoid the area and take other routes.
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Most of the impact on Carnival's earnings will be in the second quarter. Overall, there has been no impact on booking trends due to the situation in the Red Sea. Carnival will report first-quarter results on March 21, and will update the second quarter about three months later.
Overall, Carnival said it is seeing an “early and strong start to the wave season (peak booking period), exceeding expectations.”
CCL for Carnival Company,
The stock was down 0.2% in afternoon trading.
“For 2024, the company continues to have its best ever booked position, with pricing (in constant currency) and occupancy well above 2023 levels,” the company said.
“The company believes that continued strong bookings momentum is expected to deliver outperformance during the year, offsetting the impact of Red Sea rerouting.”
Carnival Corp. stock has risen 54.1% in the past year, compared with the S&P 500 SPX's rise of 20.9%..
