Carnival Corp. warns of up to $10M hit from Baltimore bridge collapse

Carnival Corporation (CCL) announced it expects up to $10 million in losses from the collapse of Baltimore's Francis Scott Key Bridge earlier this week. The cruise operator reports narrower-than-expected losses in its fiscal first-quarter earnings while raising its annual profit forecast for 2024, citing a renewed boost in travel demand.

Yahoo Finance Anchors Jared Blikre and Josh Lipton break down the latest development from Carnival and how it may operate moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

Editor's note: This article was written by Nicholas Jacobino and updated by Luke Carberry Mogan.

Video transcript

- Let's get to a trending ticker here on Yahoo Finance. Shares of Carnival-- well, they are taking a hit this morning. We're looking at losses of just about 3%. Now, the company reported a narrower-than-expected loss in its first quarter, but it also warned, though, that its guidance does not reflect the current estimated impact of the collapse of the Francis Scott Key bridge in Baltimore.

Now, Carnival is estimating that it could actually result in a hit of up to $10 million to its net income. That's a big reason why we're seeing shares under pressure here this morning.

And, Maddie, it's really overshadowing some of the trends that you were pointing out before we went to air that we are seeing in Carnival's business, what we're seeing in many of their competitors' business when it comes to record bookings, the interest that people are showing. They're willing to pay for their cruises.

But again, this hit potentially here that is not included in their guidance all related to the unfortunate tragic collapse of the bridge yesterday in Baltimore could have a real impact on their business.

- Yeah, I'm interested in hearing from analysts about this today because I don't quite understand the degree of the market reaction given some of the good numbers that were in the earnings print. $10 million is chump change for a company of this size, so I have to wonder whether people are thinking that could be an indication of broader losses to come.

And just to run through a couple of those good numbers here. Booking volumes hitting an all time high for 2025. Even adjusted EBIT for the quarter-- approximately $1.05 billion. That's over 50% growth compared to the second quarter of 2023.

They also have been criticized for having a lot of debt on their balance sheet. They were able to redeem and retire about $1 billion worth of debt in the first quarter of the year. So that is a lot of good news for them, and we're still seeing the stock down a little over 3% this morning. So I'm curious to see what the commentary is.

- Yeah, and it's also worth noting, obviously, this degree of this drop here. I agree with you, it is a bit surprising. We're going to hear a little bit more in the call. But remember that this is a stock that has had a massive run up over the last six months, over the last year. Shares are up.

They're down in the last five days. When you take a look at the longer-term chart, a one-year chart, you're looking at gains of just about nearly 90%. So it's trading just below $17 a share, right around $16.55. So that run up here, although off of those depressed levels. So maybe some of this optimism already baked in to the price at this point.

But again, the record-setting interest, the record-booking levels that we are seeing from many of these-- it's not just Carnival. Many of its competitors also seeing those trends as well. So we'll see what more we learn on the call later this morning.