(Reuters) -Carnival said on Tuesday that its annual earnings would take a hit as the cruise operator reroutes its ships that were due to pass through the Red Sea, a key transit route linking Asia and Europe.
A growing list of companies have rerouted vessels as the Houthis, a Yemeni militant group, steps up attacks on Israeli ships or ships heading towards Israel, in solidarity with the Palestinians.
The rerouting by Carnival (NYSE:CCL) is expected to have an impact of 7 cents to 8 cents on its adjusted earnings per share for full-year 2024, with the majority of the impact coming in the second quarter. Carnival had forecast an adjusted profit per share of 93 cents for the full year in December.
"Given recent developments and in close consultation with global security experts and government authorities, the company has made the decision to reroute itineraries for 12 ships across seven brands, which were scheduled to transit the Red Sea through May 2024," Carnival said in a statement.
Earlier in January, rival Royal Caribbean (NYSE:RCL) Group said it had canceled two voyages to the region due to the attacks on the ships.
Swiss Italian operator MSC Cruises also said it had canceled three trips due in April from South Africa and the United Arab Emirates to Europe.
Still, Carnival said on Tuesday it experienced an "early and robust" start to the all-important wave season, with bookings volumes hitting an all-time high since November.
The owner of Cunard and Holland America Line cruise lines said that the first half of 2024 is almost fully booked, adding that strong bookings during the year are expected to offset the impact from Red Sea rerouting.
Shares of the cruise operator were largely flat in volatile morning trade.