[EN-SEA] "Carnival" Report 48% Profit Fall for Q4

(ATLANTA) "Carnival Corp & plc", the world's largest cruise ship operator, reported a 48 per cent drop in quarterly profit last Friday because of lower ticket prices, and shares fell 3 per cent as it forecast profit for the current quarter below Wall Street estimates.

While advance bookings look strong and occupancies on an adjusted basis for the first three quarters of next year were about the same as last year, Carnival said that cruise prices have not recovered as much as it would like.

Cruise ship operators have been cutting ticket prices to entice more people aboard at a time when many would-be customers are trying to save money as they worry about unemployment and precarious finances because of the recession.

At the same time, they are coping with rising fuel prices.

Cruise costs excluding fuel are expected to fall as much as 2 per cent next year, but fuel would likely rise US$368 million next year, costing the company 46 US cents a share.

'The cost increases are probably higher than folks were looking for', and is weighing on Carnival's outlook, said Robert LaFleur, an analyst with Susquehanna Financial Group.

Carnival, which owns the Holland America and Princess Cruises lines, said that the US dollar's weakness against the euro also could boost its costs.

Carnival expects net revenue yields, a key measure of performance, to rise 2 per cent to 3 per cent in current dollars for next year. It also said that US premium brands showed pricing strength in a marked reversal from last year.

Carnival chief operating officer Howard Frank told analysts last Friday that the rise in net yield revenues 'suggests that with the strengthening of the US economy and the rise in the equity markets, that the higher-end customer is feeling better about taking their vacations'.

Carnival reported fourth-quarter net income of US$193 million, or 24 US cents a diluted share, down from US$371 million, or 47 US cents a share, last year.

Quarterly revenue fell about 3 per cent to US$3.2 billion from US$3.3 billion a year earlier.

Carnival expects profit of eight US cents to 12 cents for the first quarter, down from 33 cents for the year-ago quarter, and profit of US$2.10 to US$2.30 a share for the year ending in November 2010. It expects revenue to rise 10 per cent for next year.

Analysts expect per-share profit of 17 cents for the first quarter and $2.29 for the year, according to Thomson Reuters I/B/E/S\.

Source : Reuters-Business Times, 21.12.09.