Miami-Based Carnival Sees Shares Slide After Costa Concordia Disaster
NEW YORK -- Shares of Carnival Corp. plummeted in premarket trading on Tuesday after one of its ships capsized, raising worries of a negative impact on the cruise operator's bookings.
The Friday night incident has left at least six people dead, with 29 still missing as of Tuesday.
"The extensive media coverage of this incident and criticism of how the crew handled the situation could have some near-term impact on booking activity. A slowdown in bookings could depress pricing during the crucial wave season, the traditional peak cruise booking period that takes place the first few months of the year," said ITG Investment Research analyst Matthew Jacob in a research note.
But he noted that the industry's safety record was solid, and major accidents have been rare. Bookings have rebounded "fairly quickly" after accidents in the past, he said, and he doesn't believe there will be a long-term impact on Carnival's business.
A Jefferies analyst added that while "people could be put off cruising, at least for a time," bookings have typically recovered "relatively quickly" after accidents in the past.
A representative for Carnival could not be immediately reached for comment.
The company, which is based in Miami, will also have to deal with added costs – about $85 million to $95 million for the year ending in November. The company also said it anticipates other costs that it cannot currently predict.
Carnival's stock slid $6.08, or 18 percent, to $28.20 before the market open on Tuesday.