Carnival Results Show Cruise Industry Recovering From Disaster

Tuesday, 25 Sep 2012 01:51 PM

 

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Carnival Corp. & Plc on Tuesday reported better than expected third-quarter results, helped by a cruise industry that is coming back after a deadly accident in January involving one of its cruiseliners.

Carnival, whose Costa Concordia ran aground off the coast of Italy in January, said its cabins generated more revenue than it had anticipated and it was able to contain costs, allowing it to beat its forecasts.

After the Costa accident, bookings slowed and the company had to offer discounts to lure passengers.

But the company, whose lines also include Carnival Cruises, Princess Cruises and Holland America, said pricing is improving and should strengthen in 2013.

"These results demonstrate that the cruise industry has proven more resilient than investors had expected following the accident and is likely recovering at a faster pace than expected," ITG Senior Leisure Analyst Matthew Jacob told Reuters.

Carnival shares rose 3.3 percent to $38.23 in morning trading, hitting a 52-week high, while rival Royal Caribbean Cruises Ltd. rose 3.8 percent to $31.59.

Carnival said that in the last six weeks, bookings excluding the Costa line, which operates mostly in Europe, have risen 9 percent compared to the year-earlier period, at prices similar to last year's levels, suggesting discounting is becoming less necessary.

Carnival reported net income of $1.33 billion, or $1.71 per share, on revenue of $4.68 billion for the third quarter ended Aug. 31. That compares to net income of $1.34 billion, or $1.69 per share, on revenue of $5.06 billion a year earlier.

On an adjusted basis, earnings were $1.53 per share. Analysts expected $1.43, according to Thomson Reuters I/B/E/S.

Excluding the impact of currency, net revenue yield, which reflects what each cabin generates, fell 5.3 percent in the quarter, less than the 6 percent to 7 percent the company had forecast in June.

Carnival narrowed its full-year profit view range. It now expects an adjusted profit of $1.83 to $1.87 per share, compared with an earlier range of $1.80 to $1.90.

© 2014 Thomson/Reuters. All rights reserved.

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