Carnival faces choppy seas with European economy
Carnival Corporation & plc announced $37m in net income for its first quarter of 2013, compared to a net loss of $139m in Q1 2012.
Its Q1 revenues for the three months to the end of February were $3.6bn, in line with this time last year, but cumulative advance bookings for 2013 are behind the prior year.
Micky Arison, chairman and chief executive, said: ‘Booking volumes during our seasonally strong wave period have remained solid with pricing comparisons improving in recent weeks.
‘However, economic uncertainty in Europe continues to hinder yield growth.’
The cruise line has also been hit by adverse publicity from technical hitches on Carnival Triumph last month, and Carnival Dream and Carnival Legend last week.
Arison added: ‘Despite considerable attention surrounding the Carnival Triumph, we had been encouraged to see booking volumes for Carnival Cruise Lines recover significantly in recent weeks.
‘Attractive pricing promotions, combined with strong support from the travel agent community and consumers who recognise the company’s well-established reputation and quality product offering, were driving the strong booking volumes.’
Analysts at leisure broker Morgan Stanley said Carnival did not represent a ‘buying opportunity’ and posed several questions about the future for the brand and the wider cruise industry.
It noted that the three recent incidents on Carnival ships ‘do not inspire customer confidence’ and, as the cruise giant represents about half the industry, it asked ‘could perception remain tarnished for an extended period?’.
A safety review carried out in the wake of the three incidents will lead to higher costs and Carnival may also need to increase marketing spend, added Morgan Stanley.
Carnival Corporation & plc is the largest cruise company in the world, with brands including Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard and P&O Cruises (UK).
To see the Q1 results, click here.