Cruise ship giant Carnival posts earnings surprise as bookings rebound
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Cruise ship operator Carnival Corp. today reported better-than-expected third-quarter earnings and said bookings continued to improve, another sign that consumers are opening their wallets a little wider.
From Reuters:
Carnival lifted its 2009 earnings forecast and said ticket prices for its cruises were stabilizing. Bookings for the next three quarters were 19% ahead of 2008 levels, spurred in part by heavy discounting. Travelers are also booking cruises earlier, which has helped rates stabilize, Carnival noted. Chief Operating Officer Howard Frank said during a call that rates were unlikely to fall further in the fourth quarter, given the strength of late bookings. ‘For a limited number of itineraries ... we have been able to move prices up,’ Frank said.
The Miami-based company’s stock gained $1.52, or 4.8%, to $33.52 today, although it pulled back after trading as high as $34.95. The shares are up 38% this year after plunging 45% last year.
Carnival’s rival, Royal Caribbean Cruises, rose 73 cents, or 3.1%, to $23.97, a 52-week high.
Carnival earned $1.07 billion, or $1.33 a share, in the quarter ended Aug. 31. That was down from $1.35 billion, or $1.65 a share a year earlier, but well above analysts’ average estimate of $1.18 a share. Sales were off 14% from a year earlier, to $4.1 billion.
A big dive in fuel costs compared with a year earlier helped the bottom line last quarter.
The company, whose brands include Holland America, Princess Cruises and the Cunard Line, raised its full-year profit forecast to a range of $2.16 to $2.20 a share from a previous forecast of $2 to $2.10.
Still, Frank told analysts that Carnival was cautious about 2010 because of expectations that high unemployment would hinder consumer spending.
He specifically cited pricing for the company’s Mexican Pacific coast cruises as a ‘challenge’ because of the ‘significant economic slowdown in Southern California.’
-- Tom Petruno