Carnival Cruise Lines (CCL) posted a small but surprising fourth-quarter profit as it began to win back passengers after a year when its ships were often seen in the news behind tow boats.Carnival has had two rough years, with the Costa Concordia running aground near Italy in 2012, and mechanical problems and fires this year.
The bad publicity is still hurting the
company. Net income for the fourth quarter fell 29 percent to $66 million, or 8
cents per share, compared with a year earlier when it earned $93 million, or 12
cents per share.
Its adjusted profit was 4 cents per
share. That was still better than the break-even result expected by analysts
surveyed by FactSet.
The quarter's results were helped by "accelerated progress in Carnival Cruise Lines' brand recovery," said president and CEO Arnold Donald in a written statement. He took over after Micky Arison, who had been CEO since 1979, was replaced.In February, a fire on the Carnival Triumph knocked out power and stranded passengers for five days in the Gulf of Mexico. Two other vessels later lost power and had to be towed as well. Dozens of future sailings were canceled as the company repaired those ships. In April, it said it would spend $300 million to add backup generators, upgrade fire safety and improve engine rooms on all of its ships.
Carnival has been using discounts to
get passengers back onto its ships. It has also been reaching out to travel
agents, launched a new ad campaign, and issued a hassle-free vacation
Some of its efforts worked, as the
number of passengers rose 3 percent from a year earlier. But the amount of
revenue per berth, per day declined about 1 percent. The company predicted a
decline of 3 percent to 4 percent for the upcoming quarter.
Since September, booking volumes for
the first three quarters of next year "are running well ahead of last
year's levels," though at lower prices. Overall bookings for all of 2014
are still behind the pace of last year, the company said.
Revenue for the September-November
quarter rose 2 percent to $3.66 billion, also better than analysts expected.
Carnival said it expects costs per
berth to rise 4.5 percent to 5.5 percent compared to a year earlier because
it's spending more on advertising. It said it expects an adjusted first-quarter
loss of 7 cents to 11 cents per share. Analysts had been expecting a loss of 7
cents per share.
Shares of Miami-based Carnival Corp.
rose $1.52, or 4 percent, to $38.63 in afternoon trading.