Proactive Investors - Run By Investors For Investors

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.

View full CCL profile View Profile

Carnival Timeline

Related Articles

Garden Route
June 19 2019
The luxury travel specialises in bespoke holidays and holds over 3,500 hotel and agency contracts around the world
Theme Park
March 28 2019
Canaccord Genuity upgraded its rating for accesso to ‘buy’ from hold’ following the e-ticketing and guest experience firm’s recent full-year 2018 results

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use