Slip in profits at Carnival Corporation

Slip in profits at Carnival Corporation

Rising fuel costs have seen profits at Carnival Corporation slip over the second quarter – despite rising revenue.

The cruise giant – which owns the Carnival, Holland America and Princess lines – recorded profits of $252 million in the three months to May 31st, compared to a figure of $264 million a year earlier.

This was despite revenue for the period increasing from $2.9 billion in 2009 to $3.2 billion this year.

However, Carnival Corporation chairman Micky Arison indicated operating results for the second quarter 2010 exceeded the company’s March guidance – largely as a result of better than expected net revenue yields and cost reductions.

Commenting on the second quarter, Arison said, “We were encouraged to see revenue yields turn positive for the first time since late 2008.

“Improving revenue yields combined with an eight per cent capacity increase and ongoing cost control efforts offset significantly higher fuel prices.”

In a positive sing the cruise sector may have turned the corner, Carnival said the ratio of revenue to occupancy rose two per cent for the quarter.

Carnival detailed increased fuel prices – which rose 64 per cent over the period - negatively impacted earnings by $0.20 per share during the quarter.

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The Miami-based company also said full-year forecast for net income stands between $2.25 per share and $2.35 per share.

In 2009, its full-year net income was $2.24 per share.

Mr Arison noted: “Considering recent global economic concerns and other world events our advance bookings are holding up reasonably well and remain in line with our expectations.

“We believe this will lead to earnings growth in both the third and fourth quarters. The summer season, which is our strongest and most important quarter of the year, is shaping up particularly well.”