Summer may be a great time for taking a cruise -- but it hasn't been a particularly bright time for Carnival (NYSE: CCL) (NYSE: CUK) shareholders. The world's biggest cruise operator's stock is down by more than 18% since the start of July -- even though it reported positive news in its latest earnings report, such as record bookings and progress on reducing its debt load.
Of course, it's important to put that share price performance into context. Carnival soared by more than 100% in the first half of the year, so it wasn't surprising that a pullback occurred at a certain point. But you still may wonder if this is just a temporary dip, offering you a buying opportunity -- or the beginning of a bigger drop.
First, let's talk about what may have driven Carnival shares higher in the first place, and that's a business recovery from an extremely difficult time. The pandemic crushed the cruising giant, forcing it to stop sailing and driving it to an annual loss. To keep itself afloat -- excuse the pun -- while its revenues were paused, Carnival took on a massive amount of debt, with total borrowings peaking at more than $35 billion.
Source Fool.com