Carnival Cruise Lines earnings to plummet after cruise ship fire

Carnival Splendor

The Carnival Splendor fire will cost the Carnival Cruise company a lot of lost revenue. Image: CurtisPalmer/Flickr/CC-BY

The Carnival Cruise Lines took a heavy blow to its image when the Carnival Splendor cruise ship fire broke out. The ship recently was towed to port and is expected to need at least two months of repairs. The Carnival company expects to lose up to 20 percent of its fourth quarter stock earnings.

Carnival cruise company to lose a fifth of share price

Carnival Cruise Lines has recently disclosed some expected heavy losses as a result of the Carnival cruise ship fire. The company is expected to drop at least 7 cents per share on its price after the fire aboard the Carnival Splendor. Overall, Carnival, according to ABC, is anticipating a loss on its fourth quarter earnings of at least one-fifth, or 20 percent, of its stock earnings because of the incident. All told, it should add up to $56 million. The company will be losing revenue not only because of a loss of business but also considerable repair costs for patching up the Carnival Splendor after the fire.

Splendor in dock for repairs

Carnival’s Splendor cruise ship arrived days ago in San Diego after it was towed in from the Gulf of Mexico. The Carnival Splendor fire caused the ship to go dead in the water, and the Carnival cruise turned out to be a Carnival tow to San Diego, with cruise ship passengers stuck in deplorable conditions. The ship is being inspected by investigators and then repairs will begin. The ship is expected to be out of service until at least January. Carnival Cruise Lines is the largest cruise operator in the world, owning not only Carnival but also Princess Cruise, Cunard and Holland America cruise lines.

Refunds and discounts for the displaced

People who had booked passage on the Splendor will be compensated by the company. Carnival is refunding both cruise and airfare and will offer a 25 percent discount on a future cruise with the company.

Sources

ABC on Carnival Earnings

ABC on the Splendor

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