Carnival Cruise Lines said Wednesday the deadly Chinese coronavirus could dent earnings this year by as much as 65 cents per share if the cruise line is forced to suspend its operations in Asia.
“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,” the company said in a statement.
Carnival shares rose more than 2% on Wednesday despite the disclosure as investors have been anticipating a material impact to earnings because of the virus. The shares are down 13% this year.
Cruise lines and other travel stocks have been hit hard this year as the deadly coronavirus spreads throughout the globe, infecting more than 45,000 people and killing more than 1,100 people. Carnival previously suspended cruise operations from ports in China and is now cancelling cruises in other parts of Asia.
“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,” Carnival said.
At its last earnings report in December 2019, the company said it expects full year 2020 earnings between $4.30 per share and $4.60 per share.
Carnival reports first quarter earnings at the end of March.
Diamond Princess cruise ships, which is operated by Carnival’s Princess Cruises, confirmed Tuesday 39 new positive cases of the coronavirus on board Diamond Princess, according to the Japanese Ministry of Health. That brings the total to approximately 175, based on the companies updates.
Princess Cruises last week placed 3,700 passengers and crew under a two-week mandatory quarantine after 10 passengers tested positive for the fast-spreading virus.
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