Carnival Beats Estimates, Raises Forecast

The 2012-built Carnival Breeze. Photo: Creative Commons

By Christopher Palmeri and John Fahnenstiel

(Bloomberg) — Carnival Corp., the world’s largest cruise- line operator, reported second-quarter profit that beat analysts’ estimates and raised the lower range of its 2015 earnings forecast, saying bookings for the next three quarters are running well ahead of last year.

Profit rose to 25 cents a share, excluding some items, last quarter from 9 cents a year earlier, the Miami-based company said Tuesday in a statement. That beat the 16-cent average of 17 estimates compiled by Bloomberg.

Carnival and other cruise lines have shifted ships to the Caribbean from the Mediterranean in recent years to counter weakness in European economies. That’s increased capacity in the U.S. market and put pressure on ticket prices. The company also said currency fluctuations reduced second-quarter earnings by 10 cents per share.

Since taking over as chief executive officer in July 2013, Arnold Donald has revamped Carnival’s marketing and customer service, commissioned new ships and worked to counter damage to the brand from highly publicized mishaps, including the 2012 grounding of the Costa Concordia off the coast of Italy, which killed 32 people.

The company now expects 2015 earnings in the range of $2.35 to $2.50 a share, up from a range of $2.30 to $2.50 in April.

The Caribbean represented 34 percent of the company’s cruise-ship capacity last year, according to a regulatory filing. Carnival this month introduced fathom, a new line aimed at customers who want to do good while they sail. The first itinerary next year will include a stop in the Dominican Republic, where guests can build homes or teach English before returning to the ship.

©2015 Bloomberg News

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