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How Much More Can Carnival Cruise Lines Take?

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Carnival just can't seem to catch a break -- another cruise ship is experiencing problems and an island cruise center had to be shut down after many guests were reported sick.

On Wednesday, the Carnival Triumph broke loose from its dock in Mobile, Ala., after a storm. And Carnival said the Grand Turk cruise center will be closed for the rest of the week after a number of guests reported symptoms of gastroenteritis.

These latest debacles come a little over a month after an engine fire on the Triumph, the same ship that just broke loose, knocked out its power, stranding passengers for days in the Gulf of Mexico, and a year after the disastrous Costa Concordia shipwreck off the coast of Italy that left 32 people dead.

You might think the company's stock would be pummeled by wave after wave of bad news but in fact, it's currently trading right where it was before the Costa Concordia accident.

"I think after the Costa Concordia, we saw that business was very resilient," said Jaime Katz, an equity analyst at Morningstar.

"In the near term, people become very hesitant about paying up to take a cruise but as time lapses between any sort of accident and the booking of a cruise, the prices seem to rebound and become more resilient again and get back to a more normalized rate," she said.

Katz added that there is a lot of operating leverage in the cruise business and as long as the ships sail at capacity, they're going to be able to turn a profit.

"Obviously profitability is not growing how management wants it to grow but I think maybe not this year but next year, we start see kind of a a resumption in growth of earnings again," she said.

By Katie Little, CNBC

For more cruise news & articles go to http://www.cruisecrazies.com/index.html

Re-posted on CruiseCrazies.com - Cruise News, Articles, Forums, Packing List, Ship Tracker, and more


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Just a couple of things I want to point out regarding this story. The Triumph breaking away from it's moorings was not a Carnival mistake but a reaction to mother natures winds that were in excess of 70 knots and those excessive winds also blew a security shack into the bay. There were a couple of hundred crew and repair personnel onboard when the mooring lines broke and all have been accounted for and are uninjured.

The situation with the Grand Turk port has not been directly associated with the ships visiting the port but with the port center itself. If ANY of these incidents had happened to any other cruise ship or line, good chance it would go unreported. To call these incidents "debacles" to me is an over-dramatic statement!!!

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It has since been reported that it wasn’t the lines that broke but four of the bollards which are embedded in the pier. Certainly nothing Carnival had anything to do with…

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