Trump banned U.S. cruise ships from traveling to Cuba, and Carnival is feeling the pain
The Trump administration's ban on cruise-ship travel to Cuba has made Carnival Corp more pessimistic about its financial performance this year.
The company projected the Cuba travel ban would slash $0.04 to $0.06 from its share price this year.
In a note to investors, JPMorgan said it believed Carnival shareholders had expected the impact of the Cuba travel ban to be too small to have a negative impact on earnings guidance.
The Trump administration's ban on cruise-ship travel to Cuba has made Carnival Corp more pessimistic about its financial performance this year.
Carnival cut its full-year earnings-per-share forecast from $4.35-$4.55 to $4.25-$4.35 in its second-quarter earnings report, released on Thursday, citing travel restrictions between the US and Cuba as one of the reasons for its revised expectations. The company projected the travel ban would slash $0.04 to $0.06 from its share price this year.
Carnival said canceled cruises on its Carnival Vista ship and lowered expectations for net revenue also contributed to the cut in its full-year earnings forecast.
In a note to investors, JPMorgan said it believed Carnival shareholders had expected the impact of the Cuba travel ban to be too small to have a negative impact on earnings guidance.
President Donald Trump's administration announced earlier this month that it would end an educational travel program and ban "passenger and recreational vessels" — which include cruise ships and yachts, as well as private and corporate planes — from traveling to Cuba.
The State Department cited as reasons for the ban the Cuban government's repression of its citizens and support of Venezuelan President Nicolas Maduro, who faces a challenge from opposition leader Juan Guaido amid a spiraling economic crisis.
The Trump administration has previously condemned Cuba's support of Maduro and threatened an embargo on the country.
"Veiled tourism has served to line the pockets of the Cuban military, the very same people supporting Nicolas Maduro in Venezuela and repressing the Cuban people on the island," the US State Department said in a statement on June 4. "The United States calls on the regime to abandon its repression of Cubans, cease its interference in Venezuela, and work toward building a stable, prosperous, and free country for the Cuban people."
Travel from the US to Cuba is still permitted under some circumstances, including visits to family members, government affairs, and humanitarian projects.
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