Stock of Carnival Is Still Taking On Water

Carnival Corp. shareholders appear to be jumping overboard.

Stock of the world’s largest cruise operator (ticker symbol: CCL) is down 33% this year after sliding $2.13 on Wednesday to close at $31.88 on the New York Stock Exchange.

The cruise ship Destiny began returning to the company’s home port in Miami on Wednesday, a day after a mechanical problem left nearly 3,000 passengers stranded in the Atlantic.

The Destiny’s breakdown is the latest in a series of problems at sea for Carnival.

“I think investors are getting tired of these ‘one-time’ events,” said Credit Suisse First Boston Inc. analyst David Anders, who nonetheless rates the shares a “strong buy.”

Last month, Carnival’s cruise ship Celebration caught fire near Jamaica. And its ship Tropicale caught fire in September, leaving it stranded in the Gulf of Mexico for two days as a tropical storm delayed its return to port in Florida.

Along with the fires and mechanical problems, weak cruise bookings have weighed on the shares. And Carnival’s planned $641-million purchase of time-share resort operator Fairfield Communities Inc. is expected to lower profit margins, analysts said.

Major rival Royal Caribbean Cruises Ltd. (RCL) has encountered rough going as well, slipping 24% this year to $37.25 on the NYSE. But several analysts have recently upgraded that stock amid the sell-off.

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Sinking Ship

Shares of cruise line operator Carnival Corp. are down a third this year. Weekly closes and latest on the NYSE:

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Wednesday: $31.88, down $2.13

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Source: Bloomberg News