Carnival Corporation & plc, the world’s largest cruise shipping group, has issued a profit warning due to the coronavirus outbreak and currently estimates that the virus could wipe up to $0.65 per share of its earnings in the financial year to 30 November 2020.
“Since the situation continues to evolve, the company is currently unable to determine the full financial impact on its fiscal year 2020. 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 said in a statement.
In its 2019 result statement issued in December, the company estimated that ull year 2020 earnings are expected to include $0.12 to $0.17 per share incremental impact from prior year events and previously announced voyage disruptions, including ship delivery delays. “Based on the above factors, the company expects full year 2020 adjusted earnings per share to be in the range of $4.30 to $4.60 compared to 2019 adjusted earnings per share of $4.40,” Carnival said at the time.
In its profit warning, the company said travel restrictions as a result of coronavirus necessitated the suspension of cruise operations from ports in China, as was previously announced, 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.
“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,” Carnival said.
