Carnival Corp. Reports Lower First Quarter Profit
Carnival Corp. & plc reported net income of $236 million on revenues of $3.2 billion for its first quarter ended Feb. 29. That compares to profits of $283 million on revenues of $2.7 billion for first quarter 2007. Carnival Chairman and CEO Micky Arison said that first quarter results were better than the company’s January guidance due primarily to lower-than-expected cruise costs.
“With the continued recovery of Caribbean business for our North American brands and our European brands performing well, bolstered by the strengthening euro and sterling, the company enjoyed strong revenue growth in the first quarter,” Arison said.
Fuel price increased 66 percent to $499 per metric ton for first-quarter 2008 compared to $301 per metric ton in the prior year, and was slightly below the company’s January 2008 guidance of $505 per metric ton.
On a cumulative basis, advance bookings for the remainder of 2008 are ahead of last year in terms of both occupancy and pricing. Since Carnival entered the year with less inventory remaining for sale than last year, bookings taken since the start of the wave season have been less than prior year levels. However, pricing for those bookings was higher than last year.
As a result of the strengthening euro and sterling exchange rates, the company now expects a 5.5 to 6.5 percent improvement in net revenue yields for the full year 2008 compared to 2007, versus December guidance of an increase of 4.5 to 5.5 percent.
On a constant dollar basis, net revenue yields are expected to increase 2 to 3 percent, versus December guidance of a 3 to 4 percent increase, primarily due to reduced expectations for onboard spending.
Carnival expects net cruise costs excluding fuel for the full year 2008 to be down slightly on a constant dollar basis. However, based on the forward curve higher fuel prices for full year 2008 are now forecasted to increase fuel expense by $532 million compared to 2007, which reduces full year earnings by 65 cents per share.
