Carnival Corporation (NYSE: CCL) cut its 2019 profit outlook on Thursday in response to President Trump’s ban on cruises to Cuba.
Carnival said the travel ban will trim up to USD 0.06 a share off its 2019 adjusted earnings. Higher expenses due to itinerary changes will shave off another USD 0.08 to USD 0.10, while lower net revenue yields, a key industry metric, will make an additional dent of USD 0.10 to USD 0.12. Carnival now expects full-year earnings to fall between USD 4.25 and USD 4.35 per share, down from its earlier forecast of USD 4.35 to USD 4.55.
"Over the past five years we have demonstrated our ability to overcome multiple headwinds and deliver strong operational improvement,” said President and Chief Executive Officer, Arnold Donald. “This year our growth has been hampered by a confluence of events, which we are focused on mitigating. Generating over USD 5 Billion of cash flow and with a robust business model, our business is strong, and we remain confident over time we will deliver double-digit earnings growth and growth in return on invested capital." Carnival delivered revenues of USD 4.8 Billion for the second quarter of 2019, up from USD 4.4 Billion a year earlier. Although customers spent more money onboard during the quarter, those gains were more than offset by increased fuel costs, the cruise line said. Carnival earned USD 0.66 a share for the period, down from USD 0.68 a year earlier.
Shares of Carnival have lost nearly 4% this year versus competitors like Norwegian Cruise Line Holdings Ltd. (NYSE: NYLH), up 24%, and Royal Caribbean Cruises Ltd. (NYSE: RCL), up 22%.