Carnival Corporation warned Wednesday its 2020 financial performance will take a hit if the coronavirus outbreak leads to the temporary suspension of its operations in Asia. Shares rallied following the news.
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The cruise operator said its fiscal year 2020 earnings would be impacted by 55 cents to 65 cents a share, including guest compensation, should the outbreak lead to the suspension of all of its operations in Asia. Carnival prevously forecast full year 2020 adjusted earnings per share of $4.30 to $4.60.
“Travel restrictions as a result of Coronavirus necessitated the suspension of cruise operations from ports in China, as was previously announced, and are now resulting in the cancellation of voyages in other parts of Asia,” Carnival said in a statement.
“Significant events affecting travel typically have an impact on booking patterns, with the full extent of the impact generally determined by the length of time the event influences travel decisions. 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.”
On Feb. 3, the Japanese government quarantined a Diamond Princess cruise, operated by Carnival Japan, as it arrived in Yokohama. One of the ship's passengers 3,600 passengers tested positive for the coronavirus after disembarking in Hong Kong. At least 175 passengers have fallen ill.
Carnival shares have slumped 15.5 percent this year through Tuesday, underpeforming the S&P 500's 3.9 percent gain.