Carnival 2Q Net Off 4.5% As Fuel Costs Surge; 3Q View Weak

22nd Jun 2010 14:57

DOW JONES NEWSWIRES Carnival Corp.'s (CCL) fiscal second-quarter earnings fell 4.5% as higher fuel costs offset the cruise-ship company reporting improved revenue yields for the first time since late 2008. Earnings exceeded expectations on expanded capacity and cost controls elsewhere, but revenue fell short. Shares fell 2.9% in early trading to $33.73 as Carnival also projected third-quarter earnings of $1.43 to $1.47 a share. Analysts' average estimate was $1.52, according to Thomson Reuters. The stock is up 37% the past year, more than the broader market. Carnival, which reiterated its fiscal-year profit target, said second-half booking volume is running slightly ahead of the prior year at higher prices. "Considering recent global economic concerns and other world events, our advance bookings are holding up reasonably well and remain in line with our expectations," said Chairman and Chief Executive Micky Arison. "We believe this will lead to earnings growth in both the third and fourth quarters." The cruise industry, like other segments of the travel industry, has been rebounding from prior-year's weak demand and heavy discounting. Improving demand led Carnival to raise some prices in March. For the quarter ended May 31, Carnival reported a profit of $252 million, or 32 cents a share, down from $264 million, or 33 a share, a year earlier. The company in March forecast 26 cents to 30 cents, above analysts' views at the time. Fuel costs soared 64%, cutting 20 cents a share from the bottom line, but that was still less than the company's March guidance. Meanwhile, revenue increased 8.4% to $3.2 billion, below analysts' most-recent average estimate of $3.28 billion. Net revenue yields rose 2% excluding currency fluctuations, following a 9.8% drop on that basis a year ago. The number of passengers was up 9.5% and net cruise costs, including fuel, rose 4.2% on a constant dollar basis. Carnival operates 11 cruise lines including Holland America, Cunard and namesake Carnival Cruise Lines. -By Tess Stynes, Dow Jones Newswires; 212-416-2481; [email protected] (END) Dow Jones Newswires June 22, 2010 09:57 ET (13:57 GMT)