Carnival issues earnings warning
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The biggest cruise company in the world, Carnival Corporation, has issued an updated lower earnings forecast for the second half of 2013 based on a poor first half of the year.
The firm, which put the figures down to “lower net revenue yield expectations” reported that current ticket pricing had driven higher booking volumes however because of the lower prices, net revenue was accordingly lower. This had resulted in the lower yield expectations.
Shares took a 379p hit, around 16%, sinking to 2013p.
The company now expects profits to be down 2-3% with the cancelled voyages also playing a role in the revised figures. The firm also recently announced a sale in which it was cutting the price by 40% for selected cruises with Carnival Cruise Lines.
The firm also revealed it is paying US$674 per metric ton in fuel.
London newspaper The Evening Standard quoted Shore Capital’s Martin Brown saying: “Elevated cancellations and greater levels of discounting appear to be the consequence of the PR disasters that have blighted Carnival this year.
“A period out of the front-page headlines and a demonstration of strengthening yields are clearly needed.”
It will be announcing its second quarter results in late June.