Carnival Corp. Reports Lower Fourth-Quarter Profits

Carnival Corp. & plc reported profits for its fourth-quarter of $358 million, or 44 cents diluted earnings per share, compared to net income of $416 million, or 51 cents per share, for the same period last year. Revenues for the fourth quarter increased to $3.1 billion from $2.8 billion.

The company reported record profits for the full year of $2.4 billion, or $2.95 diluted EPS, compared to net income of $2.3 billion, or $2.77 diluted EPS, for the prior year. Revenues for the full year 2007 increased to $13 billion from $11.8 billion for the prior year.

Fuel prices increased 37 percent to $433 per metric ton for the fourth quarter 2007 compared to $315 per metric ton in the prior year, and were $9 million higher than the company’s previous guidance of $421 per metric ton. Since the fourth quarter began, the company has ordered six new ships, five for its European brands and one for a North American brand.

The company placed orders for two 114,200-ton cruise ships for Costa Cruises to be delivered in 2011 and 2012, and two 71,000-ton cruise ships for AIDA Cruises scheduled to enter service in 2011 and 2012. The company also announced the construction of Queen Elizabeth, a 92,000-ton vessel for Cunard to enter service in 2010.

For the full year 2008, the company expects a 4.5 to 5.5 percent improvement in net revenue yields assuming current euro and Sterling exchange rates. On a constant dollar basis, net revenue yields are expected to increase 3 to 4 percent. Net cruise costs excluding fuel for the full year 2008 are expected to be flat to down slightly on a constant dollar basis.

However, based on the forward curve, higher fuel prices for full year 2008 are forecasted to increase fuel expense by $409 million compared to 2007 which will reduce earnings by $0.50 per share. Despite the significant increase in fuel prices the company expects full year 2008 earnings per share to be in the range of $3.10 to $3.30 versus the $2.95 recorded in full year 2007.