(AFP) Posted Tuesday January 17, 2012– 10:40am
Shares of cruise ship operator Carnival dropped sharply Tuesday after
one of the company's vessels ran aground and sank off the Italian
coast, leaving at least 11 dead.
The Nasdaq-traded shares fell
13.9 percent to $29.52 at about midday (1700 GMT) in the first trading
session since the 114,500 ton Costa Concordia, carrying 4,200 people,
struck rocks off Italy's western coast and sank onto its starboard side
in shallow water.
Carnival, which controls the vessel through
Genoa-based subsidiary Costa Crociere or Costa Cruises, said the loss
could have an immediate impact of between $85 and $95 million on its
accounts.
JPMorgan analysts downgraded the company's stocks after the accident.
Jon Ogg of 24/7 Wall St. said the steepness of the selloff was also tied to the current overall weakness in the cruise industry.
"It
sounds like too much of a drop on the surface, but this comes at a time
when the European business is rocky and at a time when promotions are
high," he said.
"Things were already tough, but this made a declining situation very bad."
The
huge Costa Concordia hit rocks and pitched over off the picturesque
Tuscan island of Giglio late Friday, a situation made worse by ship's
captain Francesco Schettino's alleged abandonment of the vessel shortly
after while passengers were still seeking safety.
The captain was
arrested as Italian navy divers continued to comb the half-submerged
hull for more than two dozen missing passengers and crew.
Costa
Crociere officials laid the blame on Schettino, who through a lawyer
Tuesday denied the allegations that he had abandoned ship.
Shares of Carnival rival Royal Caribbean Cruises on Tuesday fell also, though just 4.1 percent.
Copyright © 2012 AFP
News Tip? Email dmurphy@bhcourier.com
Twitter:@bhcourier
Facebook:@bhcourier
Youtube:@beverlyhillscourier
