Carnival Corporation cut the profit forecast for 2019 on Thursday, June 20, anticipating a hit from the sudden US ban on cruises to Cuba along with weakening demand in Europe over political uncertainty, sending the company's shares down over 7%. The profit warning also dragged down the rivals of Carnival, NCL-Norwegian Cruise Line and RCCL-Royal Caribbean, about 3%.
Carnival is the latest to warn of the financial impact of the United States ban on forms of recreational travel to Cuba, a move that sent operators scrambling to reroute cruises, usually booked a wealth in advance.
According to Carnival, its full-year earnings are due to take a 10c-12c hit from lower net revenue yields, also because of expected cheaper ticket prices for the line's European itineraries. The ban on travel to the Caribbean island would have a further 4c-6c per share impact on Carnival's full-year earnings, while changes to itineraries for Carnival Vista, sailing at slower-than-usual speed, would have an 8c-10c impact.
Overall, Carnival expects 2019 adjusted earnings in the range of $4.25$4.35 per share, down from the earlier forecast of $4.35-$4.55.
The total revenue of the company rose 11% to $4.84 billion in the 2nd quarter ended May 31, beating the average estimate of $4.53 billion (IBES data from Refinitiv).