Carnival Corp cuts profit forecast

Carnival Corp cuts profit forecast

The world’s largest cruise conglomerate Carnival Corporation last night cut its profit forecast for the second half of the year.

The US-based cruise giant blamed lower net yields and the cancellation of cruises by its main Carnival Cruise Lines brand, which has suffered from a series of problems with its ships.

The line slashed prices in the UK by up to 40% last month following the announcement of a £500 million fleet-wide operational review in the wake of an engine fire which left Carnival Triumph (pictured) stranded in the Gulf of Mexico in February and technical faults on some of its other ships.

Carnival Cruise Lines then announced the withdrawal of its two ships from Europe in 2014, although denied this was due to the recent incidents.

Miami-based parent company Carnival Corporation said last night: “Current cruise ticket pricing for the company has driven higher booking volumes; however, at the same time, it has led to lower-than-anticipated net revenue yields which has resulted in reduced earnings guidance.”

It cut its full year earnings per share expectation to a range of $1.45 to $1.65 compared with previous guidance of $1.80 to $2.10.

The group said: “The company now expects full year 2013 net revenue yields to be down 2% to 3% compared to the previous flat yield guidance for the year.

“In addition, voyage cancellations beyond those incorporated in the company’s previous earnings guidance, as well as increased selling and administrative costs, are expected to reduce earnings by approximately $0.10 per share.”

These factors, as well as current fuel prices of $674 per metric ton and currency exchange rates of $1.30 to the euro and $1.53 to the pound, prompted the new earnings outlook.

The company, which has UK brands P&O Cruises and Cunard Line, is to announce second quarter results and more details of its 2013 full year guidance in late June.

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