Carnival: coronavirus will have “material impact” on earnings

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Carnival Corporation & plc said today that it “is closely monitoring the evolving situation with respect to coronavirus” and that its “medical experts are coordinating closely with the U.S. Centers for Disease Control and Prevention and the World Health Organization to implement enhanced screening, prevention and control measures for its guests, crew and ships.”

The cruise giant says that travel restrictions as a result of coronavirus necessitated the suspension of cruise operations from ports in China,and are now resulting in the cancellation of voyages in other parts of Asia. Significant events affecting travel typically have an impact on booking patterns, with the full extent of the impact generally determined by the length of time the event influences travel decisions. As a result of coronavirus, the company believes the impact on its global bookings and cancelled voyages will have a material impact on its financial results which was not anticipated in the company’s previous 2020 earnings guidance.

“Since the situation continues to evolve, the company is currently unable to determine the full financial impact on its fiscal year 2020,” says Carnival. “However, while not currently planned, if the company had to suspend all of its operations in Asia through the end of April, this would impact its fiscal 2020 financial performance by $0.55 to $0.65 per share, which includes guest compensation. In addition, 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.”