The impacts of deviations from standard daily procedures on stock performance – a case study of Carnival Cruise Line

Abstract

Purpose: In the USA, the cruise industry has generated more than $42bn in total economic activities, involving over 356,000 jobs. The largest and most aggressive operator is acknowledged as Carnival Cruise Line (CCL), with a 48.3 per cent market share including all subsidiary companies in 2013. CCL has had a strong track record of reliability and high quality; however, within the past decade, there have been several deviations from standard daily procedure that have altered the way CCL does business. When trying to interpret changes in company performance, it is important to include other factors that may have contributed to changes at the time of any given deviation. Design/methodology/approach: The authors use time series empirical mode decomposition to visualize whether there are short- or long-term shocks to company performance in the wake of deviating events. Besides, a thorough analysis is carried out with multivariable linear regression to identify the factors that really impact CCL’s performance. Findings: This case study shows the seasonal patterns of weather issues with the largest number of hurricanes and tropical storms taking place during the third quarter of each year. Originality/value: Empirical results will enhance understanding of the industry with regard to such events. It will provide shareholders information and opinions to enhance their decision-making processes.