Carnival Corp. (CCL) Stock Rises on Earnings News
Carnival Corp. (CCL, 45.61) reported a higher first quarter profit, as strong growth in the company's European cruise brands offset pricing weakness in the Caribbean. The news helped lift shares of the Miami-based company more than 2% in early market trading.
Amid concerns about higher fuel costs and weaker Caribbean bookings, Carnival saw its stock fall about 8% in 2006. Although it continues to face some near-term economic uncertainty, we believe the longer-term prospects remain intact, given the company's position as the world's leading cruise operator and favorable demographic trends in the U.S. and abroad. With shares still off their recent highs, we would be buyers of the stock at current levels.
For the latest period, net income increased to $283 million, or $0.35 per share, from $251 million, or $0.31 per share, a year earlier. Revenue of $2.69 billion was up 9.1% year/year, driven by a 7.4% increase in cruise capacity and a 1.7% increase in gross cruise revenue yields. Analysts on average were expecting the company to post a lower profit of $0.34 per share on revenue of $2.61 million.
Carnival said strong growth in cruise revenue yields from its European business helped offset pricing weakness in the Caribbean, continuing the trend seen in recent quarters. Meanwhile, net cruise costs increased 1.3% compared to costs for the same period last year, as higher fuel prices continued to weigh on results.
For the full year, the company expects net revenue yields to be flat to up slightly compared to 2006, and projected earnings per share in a range of $2.90 to $3.10. That is inline with analysts' expectations for earnings of $3.02 per share.
--Richard Jahnke, Briefing.com
Amid concerns about higher fuel costs and weaker Caribbean bookings, Carnival saw its stock fall about 8% in 2006. Although it continues to face some near-term economic uncertainty, we believe the longer-term prospects remain intact, given the company's position as the world's leading cruise operator and favorable demographic trends in the U.S. and abroad. With shares still off their recent highs, we would be buyers of the stock at current levels.
For the latest period, net income increased to $283 million, or $0.35 per share, from $251 million, or $0.31 per share, a year earlier. Revenue of $2.69 billion was up 9.1% year/year, driven by a 7.4% increase in cruise capacity and a 1.7% increase in gross cruise revenue yields. Analysts on average were expecting the company to post a lower profit of $0.34 per share on revenue of $2.61 million.
Carnival said strong growth in cruise revenue yields from its European business helped offset pricing weakness in the Caribbean, continuing the trend seen in recent quarters. Meanwhile, net cruise costs increased 1.3% compared to costs for the same period last year, as higher fuel prices continued to weigh on results.
For the full year, the company expects net revenue yields to be flat to up slightly compared to 2006, and projected earnings per share in a range of $2.90 to $3.10. That is inline with analysts' expectations for earnings of $3.02 per share.
--Richard Jahnke, Briefing.com
Labels: Carnival Corp., CCL
posted by Stock Administrator @ 7:16 PM
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