Fuel costs hold down Carnival Q4 earnings

[OhioJeff]

http://washington.bizjournals.com/southflorida/stories/2007/12/17/daily39.html

Carnival Corp. and PLC said its fourth quarter earnings fell 14 percent, hurt by higher fuel prices.

 

 

Revenue, however, increased, as stronger pricing partially offset the expense.

The Miami-based cruise company earned $358 million, or 44 cents a share, on revenue of $3.1 billion. For the same quarter the year before, the company earned $416 million, or 51 cents a share, on revenue of $2.8 billion.

 

 

Carnival (NYSE: CCL and NYSE: CUK), which also operated the Holland America, Cunard and Princess brands, credited a 13 percent increase in ticket revenue for pushing total revenue past analysts' predictions of $3.08 billion.

 

 

For the full year, Carnival earned $2.4 billion, or $2.95 a share, on revenue of $13 billion. It earned $2.3 billion, or $2.77 a share, on revenue of $11.8 billion in 2006.

 

 

"Our brands enjoyed strong yield growth in our fourth quarter as the continued recovery of Caribbean business led to higher yields for our North American brands, while our European brands were bolstered by the stronger euro and Sterling," Chief Executive Officer Micky Arison said in a news release. "However, continually rising fuel costs and the expected higher dry-dock costs held back our fourth quarter performance."

 

 

Carnival said advance bookings for the first half of 2008 were "well ahead" of last year, in terms of both occupancy and pricing. It said advance bookings for the second half of 2008 were following a similar trend, although it is still early in the booking process.

 

 

It also expects to grow capacity by 9 percent with the addition of five new ships.

 

 

However, fuel prices are expected to increase the company's expenses by $416 million next year, cutting into its 2008 earnings by an estimated 50 cents a share.

 

 

Carnival predicted earnings between $3.10 and $3.30 share for 2008, and between 29 cents and 31 cents a share for the first quarter.

"CCL" shares closed down 24 cents to $44.01. The 52-week high was $53.73 on Jan. 19. The 52-week low was $41.70 on Aug. 16.

"CUK" shares closed up 48 cents to $43.99. The 52-week high was $55.45 on Jan. 26. The 52-week low was $40.73 on Aug. 16.