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Earnings

Carnival third quarter loss nears $3 billion, cruise operator to raise more money

(Reuters) - Carnival Corp CCL.N said on Tuesday it expects to post a loss of $2.9 billion in the third quarter, hurt by the suspension of cruises due to the COVID-19 pandemic that has brought the industry to a grinding halt.

Carnival also said it was planning to raise another $1 billion through a stock offering, adding to the billions of dollars it has already raised in debt and equity since the beginning of March, as it looks to stay afloat.

Shares of the world’s largest cruise operator, which were down about 65% this year as of Monday’s close, fell 8%.

The cruise business has been one of the worst affected from the health crisis and has forced operators to suspend ships, raise money even at the cost of pledging ships and led some to file for bankruptcy.

“There is no clear path to reopening the cruising market right now, so they have to be very proactive in staying ahead of their cash needs,” Tigress Financial Partners analyst Ivan Feinseth said.

However, Miami, Florida-based Carnival said advance bookings for the second half of 2021 are at the higher end of its historical range, even as it advertises and markets less, signaling strong pent-up demand for cruising.

While some cruise companies are restarting operations in a phased manner, including Carnival’s Costa Cruises and AIDA, the industry is far from reaching pre-COVID-19 level capacity.

The operator of Princess Cruises, whose ship at one point was the hotbed for spreading the coronavirus, said 18 of its less efficient ships have either left or are expected to leave the fleet, as it looks to cut costs and stay nimble.

The company is expected to post an adjusted loss of $1.7 billion for the third quarter ended Aug. 31, excluding non-cash impairment charges of about $900 million.

Reporting by Praveen Paramasivam in Bengaluru; Editing by Vinay Dwivedi

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