Carnival hopeful of strong bookings for 2011 as fourth-quarter profits soar
NEW YORK (AP) Carnival Corp's fourth-quarter net income climbed 29 percent, the company reported yesterday, with revenue improving as an economic recovery allowed cruise operators to demand higher prices.
People are again feeling safe enough to plunk down thousands to travel at sea with the recession's harshest effects beginning to fade for many.
“All-in-all, 2010 was an encouraging year with improved business trends from a gradually recovering economy,” Carnival chairman and CEO Micky Arison said.
The cruise operator earned $248 million, or 31 cents per share during the quarter, compared with $193 million, or 24 cents per share, a year ago.
Miami's Carnival cautioned last month that a fire that left the Carnival
Splendor adrift off Mexico's coast for three days would lower its earnings by seven cents per share.
Still, the results met the expectations of analysts polled by Thomson Reuters. Analysts' estimates normally omit one-time items.
Carnival's stock gained $1.37, or 3.2 percent, to $44.62 in morning trading yesterday after reaching a 52-week high of $45.26.
JPMorgan analyst Kevin Milota said the performance was a strong barometer for cruise demand.
Chief operating officer Howard Frank said during a conference call that overall demand for cruises continues to be strong, with the company pleased with booking trends and pricing even though neither have reached pre-recession levels.
Revenue for the period ended November 30 rose seven percent to $3.5 billion from $3.28 billion, topping Wall Street's $3.36 billion.
Net revenue yield, which measures the amount a cruise company makes from its passengers after removing expenses, rose 3.9 percent in the quarter, surpassing Carnival's outlook of 2.5 percent to 3.5 percent.
Fourth-quarter capacity rose five percent, with most gains coming in Europe, chief financial officer David Bernstein said.
For the year, Carnival's net income increased 11 percent to $1.98 billion, or $2.47 per share, compared with $1.79 billion, or $2.24 per share, in the previous year.
Annual revenue rose eight percent to $14.47 billion from $13.46 billion.
Carnival, which operates Princess Cruises, Holland America Line and Carnival Cruise Lines, predicts 2011 earnings in a range of $2.90 to $3.10 per share.