Carnival Profit Nearly Triples as Bookings Recover

Carnival (CCL), the world's No. 1 cruise group, on Thursday said quarterly earnings nearly tripled as bookings and prices recovered from lows last year caused by the invasion of Iraq.

Benefiting from a growing fleet, the Miami-based operator of Cunard, Princess and 10 other lines also said advance cruise bookings for the rest of the year are significantly ahead of last year.

Carnival shares rose 3.6 percent in New York after the company said second-quarter profit jumped to $332 million, orents a share, on a pro-forma basis. In the year-ago quarter, Carnival merged with P&O Princess (search) of Britain.

"Stronger occupancy and pricing had a very dramatic impact on our bottom line," Chief Executive Micky Arison said in a conference call.

Analysts, on average, had expected Carnival Corp. and Plc to earn 35 cents a share, according to Reuters Estimates. Forecasts had ranged from 34 cents to 36 cents, which was the same range of estimates Carnival itself gave in March.

UBS analyst Robin Farley said the cruise group's strong pricing in the quarter was impressive, given that Carnival's fleet had grown dramatically.

"What's even more remarkable is that the increase was achieved in a quarter when capacity increased 22 percent," Farley said in a research note.

Quarterly revenue rose to $2.26 billion from $1.63 billion, helped by higher ticket prices and more ships in the company's fleets, including the highly publicized Queen Mary 2 (search). Analysts had forecast revenue of about $2.18 billion.

Despite rising fuel expenses, Carnival kept a tight hand on costs in the quarter, according to Lehman Brothers analyst Felicia Kantor. Carnival's average daily cost per berth was only $101.72, in comparison with an estimate of $104.25, Kantor said in a research note.

Looking ahead, Carnival, whose 77 cruise ships sail Caribbean, European and Pacific waters, said it expects full-year earnings of $2.10 to $2.20 a share. Analysts, on average, expect $2.13 a share.

Net yield, a key revenue measure of ticket prices and occupancy that excludes travel agent commissions and air fares, rose 13.2 percent in the second quarter, driven mainly by higher occupancy, and, to a lesser extent, by currency fluctuations, company executives said in a conference call.

Net yield for full-year 2004 should increase about 6 to 8 percent, or 4 to 6 percent on a constant dollar basis, the company said.

"This is shaping up to be the most profitable quarter in Carnival's history," Arison said in a conference call with analysts. "Occupancy and pricing are well above last year."

Shares of Carnival rose $1.48 to $45.04 on the New York Stock Exchange.