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Carnival hits record profits
Carnival Corp., the world’s largest cruise operator, said third-quarter profits rose more than analysts anticipated as demand for cruises in Europe and Alaska increased, according to wire reports.
Miami-based Carnival reported third-quarter earnings rose 12% to $1.38 billion, for the quarter ended Aug. 31, versus $1.23 billion, or $1.49 a share, a year earlier.
Third-quarter revenue rose 11% to $4.32 billion from $3.91 billion for the year-ago period.
Carnival Chairman Micky Arison said the quarterly results came in better than expected primarily due to stronger pricing on bookings taken closer to departure and because of Carnival’s new ships.
”Our North American brands enjoyed another strong European season, a solid Alaska season, and a modest year over year improvement in revenue yields in the Caribbean. The recovery in the Caribbean has continued as the demand for Caribbean cruises remains strong,” Mr Arison said in a statement.
Howard Frank, Carnival’s vice chairman, told analysts in a conference call the company is well positioned to weather a slowdown in the US economy spawned by the housing downturn and mortgage woes.
That’s because its customers are mostly retirees and affluent individuals who aren’t affected by a slowdown, Mr Frank said. He said the company’s diversification of cruise operations in Europe and beyond also buffers it against a drop in the US economy.
Overall booking trends remain strong in North America and Europe.
The cruise giant said that even with a 7.5% increase in capacity over the next four quarters, it has less inventory available to sell than it did in the year-ago period.
High fuel prices have been the biggest drag on earnings. But despite increases in fuel prices, Carnival expects full year 2007 earnings to be high.
Carnival operates 82 ships, with 17 new ships scheduled to start cruising by June 2011.
Report by David Wilkening
David
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