Carnival (CCL) Warns of Financial Impact from Costa Concordia Shipwreck
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Shares of Carnival Corporation & plc (NYSE: CCL) could have a rough go come Tuesday following this weekend's tragic Costa Concordia cruise ship incident which killed at least six people after sinking off of Italy's Tuscan coast. Many otheres are still missing.
The company released some preliminary details of the financial impact of the disaster.
Carnival said it has insurance coverage for damage to the vessel with a deductible of approximately $30 million as well as insurance for third party personal injury liability subject to an additional deductible of approximately $10 million for this incident. The company self-insures for loss of use of the vessel.
While an assessment of the vessel is ongoing, Carnival said it is expected to be out of service for the remainder of our current fiscal year if not longer.
For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share. In addition, the company anticipates other costs to the business that are not possible to determine at this time.
"At this time, our priority is the safety of our passengers and crew," said Micky Arison, Carnival Corporation & plc chairman and CEO. "We are deeply saddened by this tragic event and our hearts go out to everyone affected by the grounding of the Costa Concordia and especially to the families and loved ones of those who lost their lives. They will remain in our thoughts and prayers," Arison said.
In addition to the weakness expected in shares of Carnival, rival Royal Caribbean Cruises Ltd. (NYSE: RCL) could see weakness in sympathy.
The company released some preliminary details of the financial impact of the disaster.
Carnival said it has insurance coverage for damage to the vessel with a deductible of approximately $30 million as well as insurance for third party personal injury liability subject to an additional deductible of approximately $10 million for this incident. The company self-insures for loss of use of the vessel.
While an assessment of the vessel is ongoing, Carnival said it is expected to be out of service for the remainder of our current fiscal year if not longer.
For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share. In addition, the company anticipates other costs to the business that are not possible to determine at this time.
"At this time, our priority is the safety of our passengers and crew," said Micky Arison, Carnival Corporation & plc chairman and CEO. "We are deeply saddened by this tragic event and our hearts go out to everyone affected by the grounding of the Costa Concordia and especially to the families and loved ones of those who lost their lives. They will remain in our thoughts and prayers," Arison said.
In addition to the weakness expected in shares of Carnival, rival Royal Caribbean Cruises Ltd. (NYSE: RCL) could see weakness in sympathy.
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