Carnival Profit Is Down, but Bookings Are Picking Up
Carnival Corp., the cruise ship operator that is trying to scuttle a merger of its main rivals, reported a drop in quarterly profit as fears of terrorism swamped the industry.
Since the Sept. 11 attacks on the United States, leisure companies have faced weak demand.
Two small U.S. cruise groups folded, and the remaining operators cut ticket prices, temporarily increased commissions to travel agents and slowed expansion of their pleasure fleets.
But Carnival--whose 43 ships sail as part of such lines as Cunard, Carnival and Holland America--said conditions may be brightening as bookings over the last few weeks perked up although still below year-ago rates. Pricing too was improving from deep lows reached as cruise companies scrambled to fill ships in October and November.
“We found the floor four or five weeks ago,” Carnival Chief Executive Micky Arison said of berth pricing. “We are tweaking prices up in every category.”
Arison, speaking with analysts by telephone from London, where Miami-based Carnival is pressing a $4.6-billion bid for No. 3 cruise group P&O; Princess Cruises, said many competitors also were lifting prices after a savage price war.
Carnival said operating profit for the period ended Nov. 30 fell 28% to $119.5 million, or 25 cents a share, in line with the average estimate of analysts surveyed by Thomson Financial/First Call.
The latest results exclude a $33-million charge, mostly because of a write-down in the value of two ships, and the year-earlier earnings exclude a one-time tax gain of $27 million.
Revenue rose 12.8%, to $959.1 million, but comparable net yield, a closely watched measure of revenue available per berth, was down about 7%.
Carnival shares rose 27 cents to $27.64 on the New York Stock Exchange. The stock has risen more than 61% from a low of $16.95 reached just after the attacks.
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Other earnings, excluding one-time items unless noted, include:
* Nike Inc. said fiscal second-quarter net income rose 8% to $129 million, or 49 cents a share, on strong sales in Europe and Asia and a better performance from managers. Sales rose 6% to $2.3 billion. The results were 2 cents higher than the average estimate of analysts. Nike also said it expects modest sales and profit growth for the year despite a shaky U.S. retail environment.
Future orders, scheduled for delivery between December and April, were $3.9 billion, up 8% from a year ago, executives said.
* ConAgra Foods Inc. said profit in its fiscal second quarter ended Nov. 25 fell 18% to $231.6 million, or 44 cents a share, as advertising expenses rose, the recession hurt sales and prices for agricultural products fell. The results were a penny better than forecasts. Revenue edged up 1.8% to $7.36 billion.
* Bed Bath & Beyond said fiscal third-quarter earnings grew 30% to $53 million, or 18 cents a share, in line with Wall Street’s estimates, as revenue climbed 26% to $759.4 million.
* Burlington Coat Factory Warehouse Corp. said its fiscal second-quarter profit fell 13% to $41.3 million, or 93 cents a share, as unusually warm weather hurt sales. Revenue rose 1.2% to $744.2 million.
* Good Guys Inc. said its fiscal third-quarter loss narrowed to $8.08 million, or 35 cents a share, from $11.9 million, or 52 cents, a year ago, as it spent less on advertising and distribution. Sales fell 4.3% to $198 million. The Alameda-based firm also said December sales have been slightly below expectations. The report sent shares of Good Guys down 66 cents, or 14%, to $4.11 on Nasdaq.
