Carnival Cruise Lines is a British-American owned cruise line,Carnival Corporation & plc added its 100th cruise ship to its fleet on Wednesday April 27. Carnival Corporation & plc is a global cruise company and one of the largest vacation companies in the world. Our portfolio of leading cruise brands includes Carnival Cruise Lines, Holland America Line, Princess Cruises and Seabourn in North America; P&O Cruises, and Cunard Line in the United Kingdom; AIDA in Germany; Costa Cruises in Southern Europe; Iberocruceros in Spain; and P&O Cruises in Australia.


http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/9018978/Costa-Condordia-cruise-disaster-Carnivals-investors-are-use-to-plying-choppy-waters.html

Costa Concordia: group of 6 cruise ship passengers seek £292 million compensation

A group of six passengers from the capsized Costa Concordia cruise ship is seeking $460 million (£292 million) in damages and compensation from the luxury liner's owners after it ran aground off Italy's coast.

http://www.telegraph.co.uk/news/worldnews/europe/italy/9053795/Costa-Concordia-group-of-6-cruise-ship-passengers-seek-292-million-compensation.html

..Costa Concordia 'to cut Carnival profits by $155m'

By Nathalie Thomas | Telegraph

, the cruise operator behind last month's Costa Concordia disaster, has suffered a downgrade by broker Charles Stanley amid concerns that the incident will have a long-term "material impact" on revenues this year and next.

The world's largest cruise operator warned the accident was likely to knock off between $155m (£98m) and $175m from its income this year but Sam Hart, an analyst at Charles Stanley, believes there are question marks over the "longer-term prospects of the company".

On Monday, he downgraded the stock from “accumulate” to “hold”, warning that the negative effect both on Costa cruises and the group’s other brands will this year see a 2pc to 3pc decline in net revenue yields, a key measure of profitability per cabin.

The broker has slashed its earnings per share estimate for the 12 months to November (Stuttgart: A0Z24E - news) by 30pc and expects pre-tax profits to drop by 21.5pc to $1.5bn.

Carnival said last month that it was not yet possible to calculate the impact on revenue yields of the disaster, which led to 17 deaths, and it would update forecasts at its first-quarter results in March.

It admitted that bookings on Costa cruises in January were "down significantly" but Mr Hart expects this trend to continue for the rest of this year and "overflow" into 2013.

"Media (Frankfurt: 725292 - news) coverage of the accident means at least some potential customers are likely to opt for alternative types of holidays in the near/medium term," he said.

Mr Hart also expressed concerns over the sinking's long-term impact on the entire cruise industry, saying it could lead to a costly regulatory overhaul and more stringent safety standards. He also raised the prospect that the Carnival's insurance might not be adequate to cover all liabilities resulting from potential legal action.

The broker said: "Changes to cruise ship design could be required, with retro-fitting of older ships proving necessary. Costs associated with such action could be material. Litigation risk also exits... It is possible that all litigation liabilities may not be covered by insurance."

He added: "We ultimately expect demand for cruises to rebound over time, but forecast visibility is poor and the shares are not obviously cheap at current levels."

Carnival is expected to freeze its dividend for 2012 and analysts believe further share buybacks are unlikely.

The shares rose 1p to £19.92.

..

Investec comment today:
"We had been over-optimistic in our view that Carnival could produce a solid FY13E outturn post the Carnival Triumph issues (we had assumed net yield growth of 1% for FY13E). Although our outlook beyond FY13E assumes a strong rebound, our PT falls from 2,800p to 2,550p and faith needs to be restored in Carnival‟s ability to improve yields from FY14E.
Earnings guidance reduction. Carnival has reduced its net yield outlook for FY13E, moving from flat guidance to down 2-3%. The Carnival Triumph issue has been compounded by higher cruise cancellations (increased dry-docking), raised selling and administrative costs and inherent operational gearing.
Longer-term outlook. While the FY13E guidance does not necessarily impact the longer-term upside (restrained industry capacity growth, emerging markets growth, US domestic consumer strength, European recovery post-Concordia), the considerable operational gearing within the group (every 100bps of yield move has a c9% impact on earnings) has resulted in a material drop in expected FY13E EPS, with the mid-point of guidance reducing from $1.95 (range $1.80-2.10) to $1.55 (range $1.45-1.65). We have worked though our numbers and, forecasting a 2.3% net yield decline (vs previously above guidance +1.0%), our FY13E EPS moves from $2.15 to $1.62 (PBT drops from $1.67bn to $1.26bn). The impact on FY14E is more muted (EPS $2.52 vs $2.92) as we assume a net yield rebound of +4.2% (emerging markets growth, European increase and US recovery post-Triumph).
Retain BUY on reduced PT. The Carnival bull story has taken a major hit and we look for further detail at the time of Q2 results in late June. In the meantime, our DCF-based PT moves from 2,800p to 2,550p and this leads us to retain our BUY, notwithstanding expected short-term shares weakness."