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Carnival sinks as Cuba travel ban and cruise ship repairs force it to slash guidance

Carnival is having to deal with a travel ban to one of its most lucrative destinations and troubles with its Carnival Vista cruise ship, while ticket sales in Europe are coming under pressure

carnival cruise ship
The guidance cut came alongside Carnival’s second-quarter results

Carnival PLC (LON:CCL) shares sank on Thursday after the cruise operator slashed its full-year guidance once again, citing the Cuba travel ban and troubles with one of its ships as the major reasons.

Bosses cut their earnings guidance to US$4.25-US$4.35, down from their previous estimate of US$4.35-US$4.55.

READ: Carnival blames higher fuel prices as it cuts annual profit forecasts

Earlier this week, Carnival was forced to cancel three trips for its Vista cruise ship next month due to urgent repair work.

It said today that the voyage disruption would dent full-year earnings by up to US$0.10 per share.

Carnival is also expecting to take a US$0.06 per share hit from the US government’s sudden ban on cruises to Cuba.

Lucrative Cuba

President Trump’s decision has forced operators to reroute their cruises, which are usually booked and planned months in advance.

“The suddenness of the regulatory change to this high yielding destination has led to a near-term impact on revenue yields,” said Thursday’s announcement.

Chief executive Arnold Donald added that recent booking trends in continental Europe have also been impacted by “ongoing geopolitical and macroeconomic headwinds”.

Second-quarter revenues rise

For the second quarter, revenue rose 11% to US$4.84bn, beating analysts’ average estimate of US$4.53bn. Net income fell to US$451mln, down from US$561mln a year earlier.

Shares dropped 10% shortly after the statement was released to 3,646p, taking the company to the bottom of the FTSE 100 index in London.

Quick facts: Carnival

Price: 3161 GBX

LSE:CCL
Market: LSE
Market Cap: £22.44 billion
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