Carnival lowers earnings guidance

22nd Mar 2011 17:18

Cruise operator Carnival has had a hard time of it of late as the oil price continues heading north at pace, and it predicts that increased fuel costs for the current financial year will put a 45 cent dent in earnings per share (EPS).On the plus side, exchange rates have moved in the company's favour since it issued earnings guidance in December and it now expects currency fluctuations will offset the higher fuel costs to the tune of around nine cents per share. Net cruise costs excluding fuel per available lower berth day for fiscal 2011 are expected to be flat or marginally higher on a constant dollar basis compared to the prior year, the company said.The company issued guidance on EPS for the current financial year, saying it expected the full year outcome to fall somewhere between $2.55 and $2.65 on a fully diluted basis, down from its December guidance of $2.90 to $3.10.Second quarter EPS are seen falling in the range of $0.20 to $0.24, compared to $0.32 in the second quarter of fiscal 2010, due to the drag on earnings from higher fuel prices.In the three months to 28 February 2011, the first quarter of the company's financial year, it saw revenue rise to $3.4bn from $3.2bn in the first quarter of the previous year, due to increased capacity and ticket prices. First quarter net revenue yield using constant exchange rates rose 2.0% on a year earlier, in line with guidance issued in December.Fuel prices increased 9% to $543 per metric ton for in the first quarter, versus $497 per metric ton in first quarter 2010.Profit before tax dipped to $157m from $160m a year earlier, while EPS eased to 19 cents from 22 cents. The first quarter dividend has been jacked up to 25 cents from 10 cents a year earlier. "Despite the uncertain world events that have unfolded during our peak booking period, we have experienced a solid wave season," said chairman and chief executive Micky Arison, adding that ticket prices for the peak summer season remain particularly strong. "Long-term fundamentals for our business remain attractive in an environment where consumers increasingly value the importance of taking their holidays," Arison maintained. Booking prices and volumes for the remaining three quarters of the company's financial year are running higher than the year before, the company said.