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Carnival Corporation second quarter profit beats expectations

Posted by Anita Dunham-Potter On June - 18 - 2009

Carnival Corporation reported a better than expected second quarter and beat Wall Street projections by 4 cents a share. Carnival cited better than expected cost containment and pricing on close-in bookings that pushed Carnval’s profit to $264 millinon on revenues of $2.9 billion or 33 cents per share. Still, the profits are down. Last year, Carnival’s second quarter profit was $390 million, or 49 cents per share, on revenues of $3.4 billion.

The impact of H1N1 flu virus (aka swine flu) cost the company 3 cents per share, currency conversion rates, and higher fuel costs all took a toll on the bottom line.

The big savings were in the form of the company’s diligence on programs focused on energy conservation — as an example the company reduced fuel consumption 6 percent.

“We were pleased with the quarterly operating results in light of the current economic environment,” said Carnival chairman and CEO Micky Arison. He added that all lines within the company continue to focus on reducing costs.

Despite the soft economy Carnival has found a price point that is attracting customers. “As we have progressed throughout the year, booking volumes have continued to accelerate with less discounting, as consumers have come to recognize the extraordinary value proposition our cruise vacations represent,” added Arison.

The company noted that an improved booking pace for the second half of 2009, with volumes running 26 percent higher than last year. Although booking levels for the balance of the year are still behind, brisker sales have helped the company close the gap to approximately 3 percentage points compared to last year. However, Carnival said ticket prices for these bookings are at substantially lower levels.

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