Carnival Corp. Downgrades Earnings Guidance as Diamond Princess Remains Quarantined – Skift

Carnival Corp. issued updated earnings guidance on Wednesday, speculating on the impact of suspending its cruise operations in Asia until the end of April due to the coronavirus, or Covid-19.

It said such measures would affect its 2020 financial performance by $0.55 to $0.65 per share, an estimate which includes what it would have to pay in guest compensation.

The company added: “The impact on global bookings will further affect the company’s financial performance. The company is currently evaluating contingency plans to mitigate the impact and will provide an update with its first quarter 2020 earnings release in late March.”

Meanwhile, the company’s Diamond Princess vessel remains moored off the east coast of Japan, with more than 200 cases on board, and counting. Passengers are being instructed to remain in their rooms.

The crisis comes at a particularly bad time for the cruise industry, during the so-called “wave season,” a popular booking period during the first three months of the year when cruise lines offer deals and packages to spur bookings. There have been reports that bookings are down as much as 40 percent. Skift reached out to the industry’s trade group, the Cruise Lines International Association, and will update this post if it responds.

At a press conference earlier in the week, World Health Organization officials were asked about the effect of the virus on the industry, specifically the MA Westerdam, a Carnival-owned ship which was denied the right to dock at five ports in violation of International Maritime Organization norms. Cambodia finally agreed to accommodate the vessel on Wednesday; it’s expected to dock today with no suspected cases on board and passengers will be screened.

“There are manageable risks associated with the conveyances and there’s plenty of guidance on how to do this properly,” Mike Ryan, WHO Executive Director for health emergency programmes said. “We need to ensure that there’s neither an overreaction or an underreaction and we need a proper risk management approach to this, as we want to see to all types of gatherings and we’re going to have this more and more in the coming weeks as we see more events and conferences and we see cruise ships.”

Carnival shares are down roughly 14 percent since the beginning of the year. Skift reached out to Carnival for comment on both the MS Westerdam and Diamond Princess vessels and will update this post when it responds.

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