Carnival's third-quarter income hit by sinking of Costa Concordia

24th Sep 2013 15:41

Carnival Corporation's shares fell Tuesday after the cruise line operator reported a decline in third-quarter income as it tries to recover from the sinking of its Costa Concordia ship last year.The company said it would take up to three years to bring the Costa brand back to profitability after its Concordia ship sank off the Italian coast in January 2012, killing 32 people. It was rolled off the seabed and onto underwater platforms last week.Non-generally accepted accounting principles (GAAP) net income in the three months to the end of August dropped to $1.1bn from $1.2bn a year ago.The group was hit by $176m impairment charges related to two Costa ships which are intended to be laid up or sold, and a $27m of impairment related to Ibero trademarks and other items. Revenue came in at $4.7bn, in line with the previous year. On a constant dollar basis, net revenue yields decreased 3.8% against the prior year.The company expects full-year 2013 net revenue yields on a constant dollarbasis to be down about 3% from last year, towards the lower end of the June guidance range due in part to ongoing geopolitical events in portions of the Eastern Mediterranean region.President and Chief Executive Officer Arnold Donald said: "While some of our current challenges and cost pressures will continue well into next year, we have tremendous opportunities to enhance shareholder value over time."Donald added that the group has implemented strategic initiatives to broaden its customer base, spur demand and mitigate environmental impacts and higher fuel costs. Shares tumbled 5.48% to 2,261p at 16:00 on Tuesday.RD