MIAMI (Bloomberg) ? Carnival Corp., the world?s largest cruise operator, said yesterday that first-quarter profit dropped 19 percent because of higher fuel costs. The company cut its annual earnings forecast, driving the shares to the biggest decline in a year.

Net income fell to $280 million, or 34 cents a share, from $345 million, or 42 cents, a year earlier. Revenue in the fiscal quarter ended on February 28 rose 2.7 percent to $2.46 billion, the Miami-based company said.

Carnival said a 63 percent rise in fuel expenses hurt profit and further increases will cut earnings this year. The company posted its smallest gain in sales in three years as customers limited onboard spending. Carnival said advance bookings since February have slowed from a year ago.

Fuel prices have ?stayed pretty stubbornly high?, said Chris Scheuer, an analyst at Thrivent Investment Management in Appleton, Wisconsin.

Shares of Carnival fell $2.38, or 4.8 percent, to $47.67 at 10.41 a.m. in New York Stock Exchange composite trading. Before yesterday, they had dropped 6.4 percent this year. Carnival operates 80 ships through lines including Princess Cruises, Holland America and Cunard.

The company expects profit of 48 cents to 50 cents a share in the current quarter and $2.90 to $3 for the fiscal year assuming fuel costs of about $336 per metric ton. Carnival is estimated to have profit of 57 cents this quarter and $3.09 for the year, according to Thomson. Carnival on December 16 said profit for the year would be $3 to $3.10 based on fuel prices of $312.

Cruise companies have been revising itineraries and slowing some ships down during trips to conserve fuel.

Daily revenue per cabin rose 1.2 percent. The company expects such revenue to be unchanged or up ?slightly? in the second quarter.

Price increases have slowed and some have declined since January, which usually starts the peak season for cruise bookings.

Rates as of March 1 were down as much as 21 percent from a year ago for some Alaska cruises and ten percent for some Caribbean cruises of fewer than seven days, A.G. Edwards & Sons Inc. analyst Tim Conder wrote in a March 21 report.

Bookings may have been hindered by warmer winter weather in the US Northeast and lingering concerns over last year?s hurricane season.

?That impulse purchase of a cruise when you see those very inviting commercials has been smaller this year,? Scheuer said.