Tags: Carnival | Profit | Forecast | Fares

Carnival Slashes Profit Forecast on Impact of Lower Fares

Monday, 20 May 2013 08:01 PM

Carnival Corp., the world's largest cruise operator, lowered its profit forecast for the second half of 2013, saying price cuts undertaken after a series of mishaps will hurt margins. The company's shares fell.

Full-year profit will total $1.45 to $1.65 a share, Miami-based Carnival said Monday in a statement. That's down from a previous forecast of $1.80 to $2.10. Analysts were projecting $1.99, the average of 27 estimates compiled by Bloomberg.

Carnival fell as much as 4.6 percent in extended trading, demonstrating the continuing fallout from several incidents at sea that attracted news coverage, including an engine-room fire on the Triumph in February that left 3,100 passengers with limited food and toilet service for several days.

The company began cutting prices to fill cabins, dropping the fare for some trips in April to as little as $38 a night per person. While bookings increased, the amount of revenue captured from each customer has declined, Carnival said today. Cancellations were also higher than expected, the company said.

Higher fuel and marketing costs, as well as less-favorable exchange rates, will also crimp profit, the company said.

Carnival dropped as low as $33.70 in extended trading. The shares advanced 0.9 percent to $35.32 at the close Monday in New York and have fallen 3.9 percent this year.

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Carnival Corp., the world's largest cruise operator, lowered its profit forecast for the second half of 2013, saying price cuts undertaken after a series of mishaps will hurt margins.
Carnival,Profit,Forecast,Fares
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2013-01-20
Monday, 20 May 2013 08:01 PM
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