Lynne Sladky/Associated Press
- Carnival Plc shares fell after the company lowered its full-year earnings outlook Thursday.
- The company also reported lower bookings and issues with itineraries on ships.
- This is the second time in six months the company has lowered its full-year earnings outlook.
- Watch Carnival trade live on Markets Insider.
Sailing the open seas is looking less appealing for both travelers and investors.
Shares of Carnival Plc sank as much as 10%, the most in more than three months, after the company slashed its full-year profit forecast during its second quarter-earnings release Thursday. This is the second time in three months the company has lowered its yearly outlook.
The company said adjusted earnings per share will be between $4.25 to $4.35, lower than the March guidance of $4.35 to $4.55. The company cited unfavorable impacts from voyage disruptions to the Carnival Vista, the US government’s policy change on travel to Cuba, and expected lower net revenue yields as reasons for the lowered outlook.
Lower bookings have also dragged on the company, as less inventory has lowered booking volumes and brought down price per booking.
"Recent booking trends have been impacted by ongoing geopolitical and macroeconomic headwinds affecting our Continental European brands, " said Carnival CEO Arnold Donald in a statement. "We continue to expect higher yields in our North America and Australia brands offset by lower yields in our Europe and Asia brands for the remainder of the year."
The company has had its fair share of issues as of late. Its Carnival Vista ship has suffered from a maximum cruising speed issue, which has forced the company to alter itineraries for the ship multiple times and cancel multiple July departures. The company has also had to change its itineraries after the US government changed its policy on travel to Cuba, which the company called a ‘high yielding destination.’
Bloomberg Intelligence analysts said that the ban on travel to Cuba affects only a small portion of Carnival’s total capacity, Bloomberg reported.
Carnival was also recently hit with a $20 million fine after dumping garbage into the ocean, in violation of international cruise-ship pollution regulations. While Carnival admitted guilt, it is not the only cruise line that commits environmental violations.
In addition, a new lawsuit filed in Miami federal court alleges that the company held an elderly man onboard one of its ships after he suffered a heart attack. He later died.
Shares of Carnival have decline 3% year-to-date.
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Source: Business Insider – feedback@businessinsider.com (Carmen Reinicke)