Carnival's Q4 Profits Drop, But Company Upbeat

Carnival Corp.'s fourth-quarter net income dropped 14 percent to $358 million, from $416 million last year, as fuel prices and other expenses rose. Carnival said that stronger pricing on close-in bookings was offset by higher-than-expected fuel costs. However, Carnival is optimistic about a pickup in its Caribbean business and pricing, as well as its continued success in Europe.

"The continued recovery of Caribbean business led to higher yields for our North American brands while our European brands were bolstered by the stronger euro and sterling," said Micky Arison, chairman and CEO of Carnival Corp. "Caribbean cruises strengthened considerably as the year progressed, and we expect that trend to continue into 2008. However, continually rising fuel costs and the expected higher drydock costs held back our fourth-quarter performance."

Arison did say there was low to no pushback on the fuel surcharges Carnival decided to implement across its North American brands. "A certain percentage will complain," Arison noted during an analyst call Thursday morning. "I'd say 99 percent of agents and consumers accepted it with no problem. There was only a slight blip in cancellations, but otherwise it went smoothly, far better than we expected."

Carnival Corp.'s capacity will rise 9 percent in 2008, driven by five ship deliveries during the year. Carnival said that advance bookings for the first half of next year are well ahead of last year in terms of both occupancy and pricing. (DE)

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