Carnival Corp, the world's largest cruise operator, forecast earnings for its most important quarter below analysts' estimates, citing a stronger dollar and growing fuel costs. While second-quarter fuel costs were 37 percent lower than last year, a recovery in crude oil prices, combined with a stronger dollar, is expected to lower earnings for the quarter ending August 31 by 6 cents per share.
Carnival has been recording higher spending by tourists aboard its cruises, but the rising strength of the dollar has meant that the company has not been able to benefit from the trend. The dollar had risen 1.7 percent against a basket of currencies in the February-May period. Carnival forecast an adjusted profit of $1.56-$1.60 per share for the third quarter, a period when the company usually makes a lion's share of its earnings due to peaking demand in the summer. Analysts on average were expecting $1.70 per share, according to Thomson Reuters I/B/E/S. Smaller rival Royal Caribbean Cruises Ltd in April cut its adjusted profit and net yields forecasts for the year, blaming the dollar and fuel costs.
Carnival said net revenue yields, a combination of onboard spending and ticket sales, are expected to fall 3-4 percent in the current quarter and 2-3 percent in fiscal 2015, mainly due to the stronger dollar. The company said it was seeing higher booking volumes for the next three quarters, compared with last year, which encouraged it to raise the low end of its full-year adjusted profit forecast to $2.35-$2.50 per share. Analysts on average were expecting a full-year profit of $2.50 per share. Carnival's shares were down 1 percent at $49.43 in morning trading on Tuesday.