The world’s largest cruise operator is feeling the brunt of Europe’s instability.

Carnival Corp., which has lines that cater to British, German, and Italian travelers, said during an earnings call Tuesday that bookings in Europe and Asia are ahead of where they were a year ago, but at lower prices.

CEO Arnold Donald said the company has run up against multiple forces: “Brexit uncertainty in the U.K., heightened political uncertainty in Germany and France, as well as ongoing economic malaise in much of Europe, including Italy.”

But, he said, “Despite those headwinds, wave season was consistent with the strengthened demand we experienced going into the year, building further confidence in our full-year revenue expectations.”

Citing fuel prices and exchange rates, Carnival Corp. cut its earnings forecast for the full year, from $4.50–$4.80 per share to $4.35–$4.55 per share. Donald said the company expects a $155 million hit from fuel and currency for 2019.

Shares were down 8.76  percent to $51.69 Tuesday afternoon.

In a note to investors, Stifel analyst Steven Wieczynski wrote in the subject line: “Expect Share Pressure Until European Concerns Dissipate.”

Wieczynski said he believed stock prices were down for several reasons. He said most investors expected some upside baked into Carnival’s initial forecast, since the company tends to be conservative in its estimates.

“We are one quarter into the year and a positive revision has not materialized,” he wrote. “Second, management’s commentary around bookings conveys a modest slowdown in the pace of overall booking volumes, while European pricing challenges persist.”

Still, the cruise company beat analyst expectations by reporting earnings of 48 cents per share for the quarter that ended Feb. 28. Revenue increased from $4.2 billion a year ago to $4.7 billion for the first fiscal quarter of 2019.

Net income, however, dropped from $391 million last year to $336 million this year due to higher costs.

Carnival said its North American and Australian brands are showing strength: the booked position for 2019 is ahead of the prior year at higher prices. One exception is Alaska, which is seeing a big increase in capacity this year. Prices there are down compared to last year’s record levels.

Executives didn’t quantify any impact from the United Kingdom’s ongoing Brexit saga, but said there were some repercussions.

“There is uncertainty relating to Brexit,” Chief Financial Officer David Bernstein said during the call. “The UK is doing okay. But clearly had it not been for the uncertainty, we probably would have done perhaps a little bit better in the UK. You will never know for sure.”

The company expects European revenue growth to be driven by capacity increases at brands including Costa Cruises, which is adding a new ship later this year, and AIDA Cruises, which added a new vessel late last year.

“Going forward, our earnings growth will include a higher contribution from capacity growth,” Donald said. “That increase in capacity will lend itself to more predictable revenue growth and enable us to better contain costs, in essence, enhancing the reliability of future earnings growth.”

Photo Credit: Costa neoRivera, part of the larger Carnival Corp. fleet, is shown in Montenegro in this photo from November 2018. Carnival released quarterly earnings Tuesday. Sergey Yeliseev / Flickr