Carnival Corporation has cut its profit forecast for the year following Hurricane Dorian, tensions in the Gulf and rising fuel prices.
The P&O Cruises parent also said the delayed delivery of Costa Smeralda had impacted earning expectations for 2019.
Total revenues for the third quarter were $6.5 billion, compared to $5.8 billion last year but the business expects full-year 2019 earnings per share to be between $4.23 to $4.27 compared to June guidance of $4.25 to $4.35.
Carnival Corporation & plc president and chief executive Arnold Donald said the business offset losses caused by external events but a rise in fuel prices had caused it to reduce its full-year guidance.
P&O Cruises scrapped its entire Dubai and Arabian Gulf 2019-20 winter programme in August amid rising fears for British-flagged vessels sailing in the region.
“We achieved additional cost improvements largely driven by leveraging our scale, offsetting the earnings impact due to voyage disruptions from the combined impact of Hurricane Dorian, the tensions in the Arabian Gulf and the delayed delivery of Costa Smeralda,” Donald said.
More:P&O Cruises pulls Dubai and Arabian Gulf programme
Cuba cruise ban knocks Carnival Corporation off course
Hurricane Dorian: Carnival brands confirm return to the Bahamas
“A further reduction in guidance for ticket and onboard revenue worth $0.06 per share in part contributed to by the high level of close-in voyage disruptions was also offset. However, due to an $0.08 impact from the recent spike in fuel prices caused by geopolitical events, we are reducing our full-year guidance for 2019 by $0.05 per share.”
The weather-related voyage disruptions, the tensions in the Gulf and a ship delivery delay are expected to have a financial impact of $0.04 to $0.06 per share compared to June guidance.
Changes in fuel prices and currency exchange rates are expected to decrease earnings by $0.08 per share also compared to June guidance.
Donald also warned it faced “headwinds” for 2020.
“As a truly global cruise company, with nearly 50% of our guests sourced outside of the US, we are facing a number of current headwinds, including weakening economies affecting our Europe and Asia segment, a strong dollar and of course, the IMO 2020 regulations, and we are working to mitigate them.
“We have taken actions to bring capacity in southern Europe more in line with demand, reflecting the current conditions which have been heavily influenced by ongoing economic malaise, the uncertain geopolitical environment and recent trends in consumer confidence.
“We have also made close-in deployment changes, including those made to address the recent situation in the Arabian Gulf, which has had an impact on recent booking trends and ticket prices.
Advanced bookings for the first half of 2020 are ahead of last year but booking volumes and prices for the first half of next year are running lower than last year.