Carnival Corporation posts net income of $264 million

Carnival Corporation & plc reported net income of $264 million on revenues of $2.9 billion for its second quarter ended May 31, 2009.

Net income for the second quarter of 2008 was $390 million on revenues of $3.4 billion. 

Operating results in the second quarter were better than the company’s March guidance due to lower than expected net cruise costs and better than expected pricing on close-in bookings. 

This was partially offset by higher fuel prices and the impact from disruptions of its Mexican cruises in response to the U.S. Centers for Disease Control (CDC) recommendations against non-essential travel to Mexico which reduced second quarter earnings by approximately $0.03 per share. 

“Despite the soft economy and rising rates of unemployment in North America and Europe, we seem to have found a price point that incentivises the book vacation,” vice chairman and chief operating officer Howard Frank said during the company’s conference call. “With these strong bookings, we are showing signs of improvement for certain itineraries.” 

Outlook 

Since March, booking volumes for the second half of 2009 are running 26 percent ahead of the prior year. Although booking levels for the remainder of the year are still behind, the higher booking volumes have enabled the company to close the gap to approximately three percentage points from last year’s levels. However, ticket prices for these bookings are at substantially lower levels. 

Carnival Corporation & plc Chairman and CEO Micky Arison, said, “As we have progressed throughout the year, booking volumes have continued to accelerate with less discounting, as consumers have come to recognise the extraordinary value proposition our cruise vacations represent.”  

The company continues to expect full year net revenue yields, on a constant dollar basis, to decrease 10 to 12 percent. The company now forecasts a 14 to 16 percent decline in net revenue yields on a current dollar basis for the full year 2009 compared to 2008 caused by unfavorable changes in currency exchange rates.  

Although the company has experienced pricing pressure on net revenue yields for its Mexican deployments in the wake of the CDC’s travel advisory, it has been more than offset by improved expectations for its broader deployments worldwide.