The problems for Carnival Corporation (NYSE: CCL) keep mounting after its Costa lines deadly accident earlier this month. The company has outlined up to a $175 million charge. The move is not just direct costs because there are some overhanging liabilities which are not yet quantified. Class action suits remain a concern, and the awful press relations as a result of the ship captain’s antics are only making matters worse.
To show just how bad this is, Carnival ADRs in New York traded a whopping 39.9 million shares after the disaster and closed down at $29.60 before bouncing. Shares were at $34.28 before the disaster. After recently climbing back to $32.00 per share, the stock has slid and now is down close to $30.00 again. Carnival’s 52-week range is $28.52 to $47.71.
Meanwhile, rival cruise line operator Royal Caribbean Cruises Ltd. (NYSE: RCL) has been suffering alongside Carnival. It wasn’t even the one with a deadly accident. Royal Caribbean’s shares closed at $26.97 after the Carnival incident versus $28.75 the day before. While its shares had recently risen back above $28.50, the stock is now back down to $27.20 versus a 52-week range of $18.70 to $48.27.
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