Cruise operator Carnival Corp. & plc (CCL: Quote,CUK: Quote,CCL.L) reported Friday a profit for the second quarter that plunged from last year, reflecting high fuel costs.
However, the company said that aggressive pricing has helped generate bookings for its Costa Cruise line. Carnival is hoping to rebuild its Costa brand after 30 people died when the Costa Concordia struck rocks and partly sank off the coast of Italy in January.
Adjusted earnings per share topped analysts' expectation on higher-than-expected revenue yields and lower-than-expected costs, while quarterly revenues missed their estimates.
The company also provided earnings guidance for the third quarter, in line with Street view, and raised its earnings forecast for the full-year 2012.
The company said "continued focus on cost controls and fuel consumption helped to mitigate the impact of higher fuel prices in the quarter."
The Miami, Florida-based company reported net earnings of $14 million or $0.02 per share for the second quarter, sharply lower than $206 million or $0.26 in the prior-year quarter.
Excluding unrealized losses on fuel derivatives, adjusted net income for the latest quarter was $159 million or $0.20 per share.
On average, 14 analysts polled by Thomson Reuters expected Carnival to earn $0.08 per share for the second quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter decreased to $3.54 billion from $3.62 billion in the same quarter last year, but missed eleven Wall Street analysts' consensus estimate of $3.55 billion.
For the second quarter, revenues from cruise passenger ticket sales totaled $2.68 billion, lower than $2.78 billion last year, and cruise on-board and other revenues for the period grew to $844 million from $817 million in the year-ago quarter.
Fuel prices for the quarter increased 12 percent to $756 per metric ton from last year's $673 per metric ton. However, this was noted to be lower than the group's March guidance of $772 per metric ton.
Looking ahead to the third quarter, Carnival expects adjusted earnings in a range of $1.42 to $1.46 per share. Analysts expect the company to report earnings of $1.44 per share for the third quarter.
For fiscal 2012, the company raised its adjusted earnings guidance to a range of $1.80 to $1.90 per share from the prior forecast in the $1.40 to $1.70 per share range. Street is currently looking for full-year earnings of $1.67 per share.
"The increase in booking volumes indicates that a progressive recovery is well underway and we are catching up following the slowdown in bookings during wave season, our peak booking period. The attractive pricing we have in the marketplace is clearly stimulating demand, especially for the Costa brand," Chairman and CEO Micky Arison said in a statement.
The company added that its long term fundamentals remain sound, and are looking to continued global expansion beyond established markets in North America and Western Europe to to develop emerging cruise markets in China and Japan.
In Friday's regular trading session, CCL is currently trading at $34.28, down $0.30 or 0.87% on a volume of 1.94 million shares. In the past 52-week period, the stock traded in a range of $28.52 to $38.83. CUK is currently trading at $34.63, down $0.39 or 1.11% on a volume of 0.12 million shares.
CCL.L is currently trading on the London Stock Exchange at 2,216.00 pence, down 50.00 pence or 2.21% on a volume of 1.10 million shares.
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by RTT Staff Writer
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