Carnival sinks on earnings guidance
Dec 18, 2009
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Shareholders in Carnival were in no mood to party after the cruise operator said its first quarter earnings are likely to be lower than the market had hoped.
Revenue in the three months to end-November, the company's fourth quarter, fell to $3.21bn from $3.30bn a year earlier, largely due to lower cruise ticket prices. For the full year, revenue sank to $13.16bn from $14.65bn the year before.
On the plus side, fourth quarter net revenue yields in constant currency terms fell less than expected, by 10.4%; the company had indicated at the end of September that it was expecting a year on year fall of around 11% to 13%.
Fourth quarter income before tax dived to $201m from $370m, while over the whole 12 months it slipped to $1,806m from $2,377m.
The company said that occupancy levels for next year are currently in line with 2009 levels, albeit at lower prices. Encouragingly, booking volumes and pricing levels have been running well ahead of last year's levels since September.
The company now expects net revenue yields on a constant dollar basis for full year 2010 to be flat or up slightly.
Earnings per share for 2009 on a diluted basis tumbled to $2.24 from $2.90 in 2008, and the company expects 2010 earnings to be in the range of $2.10 to $2.30 per share.
First quarter earnings guidance disappointed the market. Analysts are tipping the company will make earnings per share (EPS) of around 17 cents in the three months to end-February, but the company said EPS was likely to be in the range of 8 to 12 cents, down from 33 cents in the first quarter of 2009. The company said the slide was largely due to higher fuel costs this time round.
'On significantly reduced global travel demand, net revenue yields for our North American brands fell 13% while our European brands' yields fell a more modest 6% (in constant dollars),' said chairman and chief executive officer Mickey Arison.
'We are optimistic that the attractive pricing we have in the marketplace
and pent-up demand for vacation travel will continue to stimulate strong
booking volumes and lead to a solid wave season,' Arison added.
The company did not declare a fourth quarter dividend this year. Last year it paid $0.40 per share in the fourth quarter.
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