Tourists take photos at the Overseas Passenger Terminal as the Norwegian Jewel cruise ship is in lock down while health authorities test a man for Coronavirus on February 14, 2020 in Sydney, Australia.
Lisa Maree Williams | Getty Images
Norwegian Cruise Line has canceled its voyages in Asia through the third quarter of 2020 and expects to take an earnings hit of 75 cents per share for the full year because of the coronavirus, the company said Thursday.
The news sent shares down more than 4 percent to $49.68 in midday trading.
The company expects the virus to negatively impact its profit by 25 cents per share in first quarter of 2020, Norwegian CFO Mark Kempa said on the company’s earnings call.
The cruise line also said the virus had forced it to cancel, modify or redeploy 40 voyages across all three of its brands and provide compensation to customers. Twenty-one cancelled Asia voyages on its cruise ship, Norwegian Spirit, have been redeployed to the Eastern Mediterranean for summer 2020 with an “extremely condensed booking window.”
Norwegian CEO Frank Del Rio said on the call that the company took the “aggressive action” of canceling its cruises in Asia because it didn’t want to repeat what happened with the Diamond Princess, a cruise ship that had multiple cases of the coronavirus and its more than 3,700 passengers and crew quarantined.
Any guest or crew who have traveled to China, Hong Kong or Macau in the past 30 days, regardless of nationality, are not allowed to board Norwegian’s vessels.
Norwegian also said that it was too early to full account for the effects of coronavirus on its business that may result from lower demand for travel and tourism globally.
“Prior to the emergence of the virus, 2020 was shaping up to be an incredibly good year,” Del Rio said. “We entered 2020 in a record book position at all three brands and at higher prices on a comparable basis.”
But he noted that “The effects of the coronavirus outbreak on our business have been swift and severe.”
The company forecast 2020 adjusted earnings between $5.40 and $5.60 per share, excluding any impact from the outbreak. Analysts expected earnings $5.51, according to IBES data from Refinitiv.