Carnival's Q2 sales rise, but fuel costs dampen profits

21st Jun 2011 14:56

Cruise operator Carnival's shares steamed ahead after the company revealed that second quarter revenues grew by $353m in the three months ended 31 May.Shares rose by 4.5% shortly after the announcement at 14:30 on Tuesday afternoon.Second quarter revenues grew from $3.3bn to $3.6bn, due to increased capacity and improved ticket prices, the firm said. Net revenue yields (at constant currency) increased by 2.3% compared with the prior year."Our North America brands' revenue yields increased 3% in the second quarter while yields for our Europe, Australia and Asia brands were up slightly (constant dollars), having been affected by the geo-political events which unfolded in the Middle East and North Africa, as well as the earthquake and nuclear disaster in Japan," said chairman and chief executive officer Micky Arison.However, income before tax fell from $251m to $204m, as fuel costs jumped to $579m, from $416m. Earnings per share fell to $0.26, from $0.32 previously."The revenue yield improvement was more than offset by higher fuel prices which cost the company approximately $150 million, or $0.19 per share," Arison said.Fuel prices increased by 35% year-on-year to $673 per metric ton, versus $498 per metric ton in the second quarter of 2010.Nevertheless, the company raised its dividend for the period from $0.10 per share to $0.25 per share.The group said that current cumulative advance bookings for the rest of 2011 are at higher prices with lower occupancies versus last year. While pricing in North America remains strong, pricing for the Europe, Australia and Asia regions has been "significantly affected by the prolonged conflict in the Middle East and North Africa regions and earthquake in Japan."As previously announced last week, the company expects the impact of these events to cost around $0.15 per share in the second half and reduce revenue yields by 1%.For the full year, net revenue yields are expected to rise by 1.5-2.5%, compared with previous guidance (in March) of +2.5-3.5%.---BC