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Carnival Corp. expects to earn less in 2019 than it had forecast in December because of negative impacts from fuel prices and currency exchange.
In a conference call to discuss first-quarter results with analysts, Carnival Corp. said it now expects adjusted earnings in the range of $4.35 to $4.55 a share, down from $4.50 to $4.80 a share three months ago. Last year the same measure of earnings came in at $4.26 a share.
Carnival Corp. CEO Arnold Donald said that Wave season bookings were “consistent with the strength of demand we experienced going into the year.” He said bookings for the brands used most by North Americans (Carnival Cruise Line, Holland America Line, Princess Cruises, Seabourn) are strong, while demand from source markets in Europe is flat to down.
Carnival CFO David Bernstein said that prices in the Caribbean and Europe for the North American brands are “nicely higher,” while prices for Alaska cruises are lower. He said Alaska is coming off two record seasons and Carnival has an 8% capacity increase in that market this year.
Bookings for European brands are “way ahead on occupancy,” but at lower prices, a trend that Bernstein said reflects a strategy of concentrating on occupancy early. “We’re doing some pro-active management,” he said.
“It’s really a tale of two different worlds,” Bernstein said, with weakness in continental Europe offsetting strength in North America and Australia.
Brexit continues to muddy the waters for cruise sales in the U.K., Bernstein said, but isn’t a huge negative. “The U.K. is okay,” he said, adding that “had it not been for the uncertainty, we would have done perhaps a little bit better in the U.K.”
In the first quarter ended Feb. 28, without adjusting for currency, fuel and other special items, Carnival reported net income of $336 million, down from $391 million a year earlier. Revenue rose 10.4%, to $4.67 billion.
Source: travelweekly.com
