Tags: Carnival | China | Asia | cruise

Carnival Shifts COO to Shanghai as Asia Cruise Business Booms

Tuesday, 23 Sep 2014 01:02 PM

Carnival Corp. will relocate its chief operating officer to Shanghai from Miami and expand his role, underscoring the increasing importance of Asia for the world's largest cruise operator.

Strong demand from Chinese holiday makers helped the company report stronger-than-expected quarterly earnings and raise its full-year profit forecast on Tuesday.

Carnival's shares rose as much as 4 percent to a more than three-year high.

The $29 billion global cruise industry is expected to benefit in the coming years from the rise of the middle class in emerging economies such as China and India.

Companies are racing to position themselves as the cruise operators of choice for these new customers. While Carnival has a few cruise ships based in China, rival Royal Caribbean Cruises Ltd recently said it would deploy its newest ship in the country.

"China continues to be a focus for emerging market development where we expect double-digit growth over the next few years," Carnival Chief Executive Arnold Donald said on a conference call.

About 11 percent of Carnival's revenue came from Asia and Australia in the year ended November 2013.

Based in Shanghai, Chief Operations Officer Alan Buckelew will lead the company's initiatives in China and continue to provide oversight of operations around the world, Carnival said in a statement.

Buckelew, who has worked in the cruise industry for 37 years, was formerly chief executive of Carnival's Princess Cruises division.

 

Raised Outlook

The company said it now expected adjusted earnings of $1.84-$1.88 per share for the year ending Nov. 30, up from its previous forecast of $1.60-$1.75.

Net revenue yields, which blend ticket sales and money spent onboard, are expected to be flat. The company had previously forecast this measure to be down slightly.

Carnival had forecast third-quarter adjusted profit below market estimates in June, blaming increased competition in the Caribbean, the biggest cruise market.

"Things should look better in the Caribbean, beginning in the later second quarter into the third quarter, should be very good because there will be capacity reduction in the Caribbean next year versus this year," Donald said on the conference call.

The company usually earns more than 80 percent of its annual profit in the summer months of June, July and August.

Net revenue yields were up 1.8 percent on a constant currency basis in the third quarter ended Aug. 31.

Net income rose 34 percent to $1.25 billion, or $1.60 per share, in the third quarter ended Aug. 31.

Excluding items, the company earned $1.58 per share.

Revenue rose 4.7 percent to $4.95 billion.

Analysts on average had expected earnings of $1.44 per share on revenue of $4.93 billion, according to Thomson Reuters I/B/E/S.

Carnival's shares touched a high of $42.29 before easing back to trade slightly up at $40.37 on the New York Stock Exchange.

© 2017 Thomson/Reuters. All rights reserved.

   
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Carnival Corp. will relocate its chief operating officer to Shanghai from Miami and expand his role, underscoring the increasing importance of Asia for the world's largest cruise operator.
Carnival, China, Asia, cruise
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2014-02-23
Tuesday, 23 Sep 2014 01:02 PM
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