Carnival’s Annual Profits Impacted by Red Sea Rerouting

Carnival announced on Tuesday that its annual profits will be impacted as the cruise operator reroutes its ships away from the Red Sea due to increased attacks by the Yemeni militant group, the Houthis. The company expects the rerouting to have an impact of 7 to 8 cents on adjusted earnings per share for 2024, with the majority of the impact occurring in the second quarter. This decision affects 12 ships from seven brands scheduled to sail through the Red Sea through May 2024.

Other cruise companies, such as Royal Caribbean Group and MSC Cruises, have also canceled trips to the region due to the attacks on ships. Despite this, Carnival reported strong booking volumes since November, with the first half of 2024 almost fully booked. The company expects strong bookings later in the year to offset the impact of the Red Sea diversion.

Shares of Carnival were largely unchanged following the announcement. The company remains optimistic about the wave season and the future of its bookings, despite the impact on profits. This decision comes as more companies reroute their ships away from the Red Sea due to safety concerns.

The decision by Carnival to reroute its ships away from the Red Sea due to increased attacks by the Yemeni militant group, the Houthis, will impact its annual profits. The company expects the majority of the impact to occur in the second quarter of 2024. Other cruise companies have also canceled trips to the region due to safety concerns. Despite this, Carnival reported strong booking volumes and expects strong bookings later in the year to offset the impact of the Red Sea diversion.

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