Posted at 11:06 AM on January 17, 2012
by Paul Tosto
While the captain of the cruise ship Costa Concordia is taking much of the blame for the cruise ship wreck along the Italian coast, financial markets this morning are punishing the ship's owners, cruise giant Carnival Corp.
Several prominent stock analysts also downgraded the company's fortunes in the wake of the wreck.
Carnival Corp. is the parent company of Costa Cruises, which operated the Costa Concordia.
Carnival on Monday told investors the wreck may cost the company nearly $100 million:
The company has insurance coverage for damage to the vessel with a deductible of approximately $30 million as well as insurance for third party personal injury liability subject to an additional deductible of approximately $10 million for this incident. The company self-insures for loss of use of the vessel. A damage assessment review of the vessel is currently being undertaken to determine how long it will be out of service. The vessel is expected to be out of service for the remainder of our current fiscal year if not longer.
For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85-$95 million or $0.11-$0.12 per share. In addition, the company anticipates other costs to the business that are not possible to determine at this time.