Carnival Corp. Reports Flat Net Income on Higher Revenues

Carnival Corp. reported net income of $390 million on revenues of $3.4 billion for the second quarter ended May 31. Net income for the same period last year was $390 million on revenues of $2.9 billion.

Carnival said the second-quarter results were better than the guidance provided in March, due primarily to stronger-than-expected revenue yields and lower-than-expected cruise costs.

Carnival said fuel prices increased 59 percent to $530 per metric ton for second-quarter 2008 from $333 per metric ton, and was in line with the company’s March guidance of $528 per metric ton.

Primarily as a result of changes in currency exchange rates, the company now forecasts a 4.5 to 5.5 percent improvement in net revenue yields for the full-year 2008 compared to 2007, versus March 2008 guidance of an increase of 5.5 to 6.5 percent.

On a constant dollar basis, the company continues to expect net revenue yields to increase 2 to 3 percent, although lower in the range than the previous guidance, due primarily to slightly lower expectations for both cruise ticket and onboard revenues for the remainder of 2008.

The company continues to expect net cruise costs excluding fuel for the full year 2008 to be down slightly on a constant dollar basis, although it expects a modest increase in cruise costs for the remainder of the year compared to the previous guidance.

For the full-year 2008, fuel expense is now forecast to increase by $752 million compared to 2007, which reduces full-year earnings by 92 cents per share. The company now forecasts full-year 2008 earnings per share to be in the range of $2.70 to $2.80 compared to its previous guidance of $3 to $3.20.

For third quarter 2008, net revenue yields are expected to increase approximately 4 percent. Net cruise costs excluding fuel for third-quarter 2008 are expected to be up modestly on a constant dollar basis.