Carnival Corp & Plc
While advance bookings look strong and occupancies on an adjusted basis for the first three quarters of 2010 were about the same as last year, Carnival said cruise prices have not recovered as much as it would like.
Cruise ship operators have been cutting ticket prices to entice more people aboard at a time when many would-be customers are trying to save money as they worry about unemployment and precarious finances because of the recession.
At the same time, they are coping with rising fuel prices. Cruise costs excluding fuel are expected to fall as much as 2 percent for 2010, but fuel would likely rise $368 million next year, costing the company 46 cents a share.
The cost increases are probably higher than folks were looking for, and is weighing on Carnival's outlook, said Robert LaFleur, an analyst with Susquehanna Financial Group.
Carnival, which owns the Holland America and Princess Cruises lines, said the dollar's weakness against the euro also could boost its costs.
Carnival expects net revenue yields, a key measure of performance, to rise 2 percent to 3 percent in current dollars for 2010. It also said U.S. premium brands showed pricing strength in a marked reversal from last year.
I think that was a big area of concern, LaFleur said.
Carnival Chief Operating Officer Howard Frank told analysts on a conference call on Friday that the rise in net yield revenues suggests that with the strengthening of the U.S. economy and the rise in the equity markets, that the higher-end customer is feeling better about taking their vacations.
Miami-based Carnival reported fourth-quarter net income of $193 million, or 24 cents a diluted share, down from $371 million, or 47 cents a share, last year.
The average analyst estimate for Carnival's results was 20 cents a share, according to Thomson Reuters I/B/E/S.
Quarterly revenue fell about 3 percent to $3.2 billion from $3.3 billion a year earlier.
Carnival expects profit of 8 cents to 12 cents for the first quarter, down from 33 cents for the year-ago quarter, and profit of $2.10 to $2.30 a share for the year ending in November 2010. It expects revenue to rise 10 percent for 2010.
Analysts expect per-share profit of 17 cents for the first quarter and $2.29 for the year, according to Thomson Reuters I/B/E/S.
Shares of Carnival were off $1.29, or 3.87 percent, at $32.07 in New York Stock Exchange afternoon trading, while rival Royal Caribbean Cruises Ltd
(Reporting by Karen Jacobs, editing by Gerald E. McCormick, Dave Zimmerman and Robert MacMillan)