Carnival Corp.'s third-quarter earnings dipped 3 percent but beat analysts' forecasts due to lower costs and an insurance gain. Net income for the quarter came in at $1.3 billion compared to $1.4 billion at the same time last year.
While earnings were not as heady as hoped, they were better than the previous guidance provided in June. "We are very pleased with our results for the third quarter which is seasonally our strongest of the year," said Carnival Corp. Chairman and CEO Micky Arison. "Despite the uncertain economy, all our major brands globally performed quite well with increased corporate-wide revenue yields. Our North American brands, which had an increase in yields, continued to benefit from strength in Caribbean demand. Our European brands introduced significant new capacity which was well-received in their respective markets." The company’s European brands benefited from a 24 percent increase in capacity.
The volatility of fuel costs still hurt Carnival, costing the company $230 million for the third quarter compared to the same quarter one year ago. However, forecast fuel prices for the fourth quarter have decreased fuel expenses by $60 million since the June guidance. Oil prices currently are trading at under $100 per barrel.
Going forward, Carnival says occupancy levels for advance bookings for the remainder of 2008 and the first half of 2009 are lagging slightly behind the year prior, but ticket prices for these bookings are at higher levels. "While occupancy levels at this time are slightly behind the historically high levels of last year, they remain well ahead of 2006," Arison said. "Although bookings have slowed compared to the strong booking levels of a year ago, pricing is holding up well given the current difficult economic environment. The value of brand recognition and the consumer confidence they inspire is an important asset for us in uncertain economic times."