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Carnival Profit Rises 60%; Merger Helped

The addition of several ships and a recovery in the travel industry also boost quarterly results. Revenue doubles.

March 23, 2004|From Associated Press

Carnival Corp., the world's largest cruise company, reported Monday a 60% rise in fiscal first-quarter earnings because of its merger last year with P&O Princess, the addition of several ships and a strong recovery from the slowdown caused by terrorism and the Iraq war.

Net income rose to $203 million, or 25 cents a share, in the three months ended Feb. 29, from $127 million, or 22 cents, a year earlier. That beat the 22-cent-a-share estimate of Wall Street analysts surveyed by Thomson Financial.

Revenue doubled to $2 billion from $1 billion, with $749 million in new revenue coming because of Miami-based Carnival's merger with Britain's P&O Princess Cruises, completed last April. P&O Princess is now known as Carnival.

The results were also better because of the rebound from last year's first quarter, when the buildup to the war in Iraq made passengers wary of traveling and sent prices falling.

The so-called wave season of heavy bookings that runs from January through March has been strong this year, with reservations rising more than 60% in the last few months, said Howard Frank, Carnival's vice chairman and chief operating officer. The wave season is traditionally the busiest booking season for the company when many summer vacations are planned.

Prices have been recovering from last year's difficulties, and Frank said pricing on travel for the next six months is about 6% higher than a year ago.

"So we're starting to see, I think, a lot of pent-up demand coming back into the marketplace and people trying to get their bookings done now in anticipation of the possibility that prices could start to move up," Frank said.

The expectations of continued growth caused the company to raise its full-year earnings forecast from $2.02 a share to $2.05 to $2.15 a share. Analysts had expected $2.06 a share, according to Thomson Financial.

Carnival is scheduled to add seven ships to its fleet later this year, which will increase capacity 17%.

Carnival shares dropped 54 cents to $41.97 on the New York Stock Exchange.

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