Cruise Line Expects Profit on High End

P&O; Princess Cruises, which is planning to buy Royal Caribbean Cruises Ltd. and fending off a hostile bid from Carnival Corp., said its 2001 profit will be on the high end of earlier forecasts.

London-based P&O; Princess, the third-largest cruise operator after Carnival and Royal Caribbean, said earnings would be “not less” than 40 cents a share, because cruise bookings are better than expected. The company said in October it would earn 38 cents to 40 cents a share for the year, compared with 40 cents in 2000.

P&O; Princess, parent of Princess Cruises’ North American line based in Valenica, last week pushed back a planned shareholder meeting on the purchase of Royal Caribbean by a month to give Carnival a chance to improve on its $6-billion bid. The company may be releasing the positive earnings news to induce Carnival to bid more, an analyst said.

“They’re justifying the upside of their merger with Royal Caribbean, while also demonstrating to Carnival that bookings are up, so they’re worth more,” said Michelle Russo, an analyst with Deutsche Banc Alex. Brown. “Carnival has the door open to offer more if Princess can demonstrate that they’re worth more.”

Carnival, the largest cruise company, is trying to buy P&O; Princess to thwart P&O;’s planned $7.4-billion purchase of Royal Caribbean. P&O; Princess reiterated its estimate that merging its reservation system and other units with Royal Caribbean’s would save the companies $100 million annually.

P&O; Princess said bookings are higher now than a year ago, though prices are still lower after the Sept. 11 attacks. Cruise companies including Carnival have slashed prices to lure travelers.

P&O; shares rose 35 cents to $23.25, Royal Caribbean rose 67 cents to $16, and Carnival rose 29 cents to $27.97. All trade on the New York Stock Exchange.