Carnival Beats Earnings Expectations on Cost Cuts

Carnival posted a quarterly profit that beat analysts' expectations, helped by lower net cruise costs and better-than-anticipated pricing, driving shares up 5.6 percent in early trading.

The world's largest cruise operator reported net income of $264 million, or 33 cents a share, in the second quarter compared with $390 million, or 49 cents a share, a year earlier.

The earnings beat consensus estimates of 28 cents per share, according to Reuters Estimates. They were also better than the Miami-based company previously forecast.

Carnival shares were up about 7 percent in trading Thursday on the New York Stock Exchange.

Including fuel, net cruise costs dropped 9.6 percent on a constant dollar basis. Carnival said on Thursday that booking volumes for the second half of 2009 were so far 26 percent higher than in 2008.

Costs and expenses dropped nearly 13 percent compared to a year earlier.

Cruise operators' results have been pressured by higher fuel prices and an international flu pandemic. Carnival estimates the flu hurt its second-quarter results by 3 cents a share.Total revenue for the quarter was $2.9 billion, down about 15 percent from a year ago.

In the third quarter, Carnival expects to earn between $1.15 and $1.19 per share, down from the $1.65 it earned during the same three-month period in 2008.

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The company also lowered its 2009 earnings outlook to a range from $2 to $2.10. Analysts expect Carnival to finish the year with $2.08 in earnings, Reuters Estimates shows.

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