January 30, 2012 / 4:13 PM / 6 years ago

Carnival cuts profit outlook, blames Italy wreck

BOSTON (Reuters) - Carnival Corp (CCL.N) (CCL.L) on Monday said it would take a $155 million to $175 million charge against net income in fiscal 2012 because of the Costa Concordia cruise ship catastrophe.

The Costa Concordia-related hit to earnings for the year, ending in November, could be higher because of lower net revenue yields. But Carnival said in a U.S. regulatory filing that it has not yet determined that impact.

The company had earlier estimated full-year earnings of $2.55 to $2.85 a share. Analysts, on average, are expecting a profit of $2.33 a share, according to Thomson Reuters I/B/E/S.

A damage assessment of the ship is being undertaken to determine whether the ship can be repaired and what the total cost would be, the company said.

If the ship can be repaired, Carnival said, it would be out of service for the remainder of fiscal 2012 if not longer.

“We anticipate other financial impacts to our business, including lower net revenue yields, that are not possible to reasonably determine at this time,” Carnival said in a regulatory filing.

The company added it would give revised 2012 full-year earnings guidance in March 2012, which would take into account the impact of the Costa Concordia accident.

    The accident and loss of the ship off the coast of Italy will hurt net income by $85 million to $95 million in fiscal 2012, Carnival said in an annual report filing. Insurance deductibles will reduce net income by another $40 million and other incident-related costs will be between $30 million and $40 million.

    Carnival also said it significantly reduced its marketing activities after the disaster. Excluding its Costa European subsidiary, Carnival said fleet-wide booking volumes, from after the ship wrecked through January 25, declined in the “mid teens” from the previous year.

    “Costa’s booking activity is difficult to interpret because of the significant rebooking activity stemming from the loss of the ship’s use and related re-deployments,” the company said. “However, we believe it to be down significantly. Despite these recent trends, we believe the incident will not have a significant long-term impact on our business.”

    Shares of the cruise line owner were down 2 percent at $29.93 on the New York Stock Exchange.

    Reporting By Tim McLaughlin, Nivedita Bhattacharjee in Chicago; Editing by Maureen Bavdek and Steve Orlofsky

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