Carnival Shares Plummet 20% After Costa Concordia Disaster

U.K.-listed shares of Carnival (CCL: 34.28, -0.86, -2.45%) dropped close to 20% Monday morning as the markets worry about the financial impact of the Costa Concordia cruise-ship disaster off the coast of Italy over the weekend.

Analysts gave warning that the disaster, which has caused at least 6 deaths, could hurt bookings, lead to a burst of lawsuits and reduce the company’s ship capacity. Sixteen other people are believed to be missing.

The cruise ship, which was carrying 4,229 passengers and crew, had to be evacuated after hitting a reef Friday night.

Carnival, which owns the cruise line that was operating the boat, stated on Monday it is expecting the incident to hurt its 2012 earnings by $85 million to $95 million, translating to 11 cents to 12 cents a share.

The company, which is the world’s biggest cruise line operator, also gave warning that it sees “other costs to the business that are not possible to determine at this time.�

London-listed shares of Carnival, being traded on both the New York and London Stock Exchanges, plummeted 17.04% to 1,865 pounds in recent action. U.S.-listed shares were not active on Monday because of the Martin Luther King holiday.

Responding to the incident, analysts at Morgan Stanley downgraded Carnival to “equalweight” from “overweight.â€� The firm warned the situation could get worse if the investigation discovers industry safety issues or if people choose to stay away from cruises, Dow Jones Newswires reported.

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Tags: carnival, costa concordia, Dow Jones, Italy, london stock exchange, martin luther king holiday, Morgan Stanley, new york stock exchange, uk-listed shares, world's biggest cruise line