Norwegian, Carnival and Royal Caribbean Sink Fast Amid Escalating Coronavirus Fears

Shares of Norwegian Cruise Line, Carnival and Royal Caribbean are foundering.
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Cruise ship company stock prices sank Monday amid a larger market rout triggered by escalating fears over the spread of the coronavirus beyond China.

Shares of Norwegian Cruise Line Holdings (NCLH) - Get Report, Carnival (CCL) - Get Report and Royal Caribbean (RCL) - Get Report each fell by more than 5% as the number of Covid-19 cases and deaths in South Korea, Italy and Iran escalated, fueling fears of a global pandemic.

Norwegian led the way down, with shares of the cruise ship company plunging 6.98% to $43.69 a share, followed by Carnival, which dropped 5.85% to $39.25 a share. Royal Caribbean fell 5.33% to $100.34 a share.

Norwegian last week reported better-than-expected results for the fourth quarter, beating analysts' estimates on both earnings and revenue.

But the cruise line giant was less sanguine about the impact of the coronavirus on its bottom line in the future, leaving investors scrambling for the lifeboats.

The coronavirus has forced Norwegian to either outright cancel, alter or redeploy 40 different cruises, with the company pulling the plug on all cruises in Asia through the end of the third quarter this year, according to Zacks Investment Research.

Norwegian is bracing for a hit to adjusted earnings over the whole of 2020 of as much as 75 cents a share.

The company is also forecasting adjusted earnings of 48 cents a share for the first quarter, compared to the 73 cents a share it reported for the fourth quarter.

Analysts at Argus downgraded their rating on Norwegian's stock to hold from buy, citing the cancelled cruises and the challenges of redeploying ships to other regions.