Carnival shares dropped Monday after the company cut its full-year guidance, citing increased fuel costs and unfavorable currency exchange rates.
The stock closed down 7.85 percent at $58.54 per share, the largest decline since a 7.9 percent drop in February 2016, after the cruise line operator cut its full-year earnings outlook to a range between $4.15 and $4.25 from a range between $4.20 and $4.40 earnings. The Miami-based company said it expects rising fuel prices will lower its full-year earnings per share by 19 cents.
CEO Arnold Donald assured CNBC's "Closing Bell" that the drop in guidance was based entirely on rising fuel costs, saying that the company would be working hard to offset them.
In the quarterly conference call, Donald also said that, despite the forecast cut, "we continue to have strong operating performance despite the impact of fueling currency."
"Essentially, strength and underlying demand for our cruise offerings plus greater ticket prices year-to-date ... more than offset the unfavorable impact of fuel and currency for the full year compared to our December guidance," Donald said.
The company also expects its third-quarter profit to range from $2.25 to $2.29 per share, well below a Thomson Reuters estimate of $2.47.
Other cruise line stocks felt pressure after Carnival's earnings report as well, with Norwegian Cruise Line falling 7.2 percent and Royal Caribbean Cruises down 5.1 percent.
Carnival also reported adjusted earnings for fiscal second quarter beat estimates at 68 cents per share, above the Reuters estimated 60 cents. Revenue for the quarter was $4.4 billion versus the expected $4.32 billion, fed by booking volumes at above levels from the prior year.
The company's stock was already under pressure prior to Monday's drop, having fallen 4.3 percent this year through Friday's close.