Carnival's Profits Gets Boost From Weak Dollar
Carnival, the world's largest cruise operator, reported greater-than-expected quarterly profit on Thursday, helped by higher capacity and the weak dollar.
Miami-based Carnival, which operates the Holland America, Cunard and Princess cruise lines, said fourth-quarter net income rose 23.8% to $416 million, or 51 cents a share, from $336 million, or 41 cents a share, in the year-ago period.
Wall Street was expecting Carnival to post a profit of 47 cents a share, according to Thomson Financial.
"Currency helped them a lot in the quarter," Susquehanna Financial Group analyst Robert LaFleur said. "The weak dollar is helping them."
The cruise industry has struggled this year with higher fuel costs and weaker business in the Caribbean market, which has been hurt by a slowing U.S. economy and last year's devastating U.S. hurricane season.
But Carnival and rival Royal Caribbean Cruises have been helped by strong business in Europe and Alaska.
"Europe is very strong. Alaska is very strong. And the Caribbean is very weak," LaFleur said.
Revenue rose 9.2 percent to $2.81 billion from a year earlier, helped by a 5.5% increase in capacity and higher cruise revenue yields. Analysts, on average, expected the company to post sales of $2.79 billion.
Looking ahead, the company said it expects earnings per share of 33 cents to 35 cents in the first quarter of next year. For full year 2007, Carnival expects earnings per share to be between $2.90 and $3.10.