Carnival reports $1 billion profit in 3rd quarter

MIAMI -- Carnival Corp. & PLC, the world's largest cruise company, reported today that higher ticket prices and onboard sales propelled third-quarter earnings up 40 percent to its best three-month results ever.

The Miami-based company reported net income of $1.03 billion, or $1.23 a share, in the June-to-August period, compared with $734 million, or 90 cents a share, in the same period a year earlier. The results beat the $1.20 a share average estimate of Wall Street analysts surveyed by Thomson First Call.

Revenues were $3.25 billion, up from $2.52 billion a year ago. This quarter was the first when reported results for this year and last year included Carnival's April 2003 merger with P&O Princess plc. Last year's third quarter was the previous record for three-month earnings, the company said.

It is "the first time we have earned more than a billion dollars in a single quarter," said Micky Arison, Carnival's chairman and chief executive. "All of our major cruise brands in North America and Europe are performing well, building confidence in our outlook for the combined group for 2005."

Net revenue yields, a measure of how much money a company makes per passenger, from cruise packages and onboard sales after cost of air transportation and travel agent commissions, rose 10.9 percent in the quarter.

"Consumers seem more willing to spend money this year than they have in the past," especially in Europe, chief financial officer Gerald Cahill said during a conference call with analysts.

Howard Frank, vice chairman and chief operating officer, gushed, "It was just an excellent, excellent execution of the third quarter. It was truly superb."

Carnival has 77 ships across 12 brands and is scheduled to add eight more new ships to its fleet through December 2006. Despite an expected passenger capacity increase of 17 percent this year, bookings and prices for the rest of the year are ahead of last year, Arison said.

The company expects fourth-quarter earnings to be in the range of 30 cents to 32 cents a share. The estimates include a projected decline of 4 cents to 6 cents a share for Hurricane Frances and for moving the headquarters of its Cunard brand. They also said $30 million in higher fuel costs will affect the earnings. Analysts expect 31 cents a share, according to Thomson First Call.

Asked whether the active hurricane season would affect the consumer appetite for cruises, Arison acknowledged "a dampening of spirits and bookings" when hurricanes lead newscasts. But he added, "Bookings bounce back very, very quickly. It's really not a long-term concern."

For the full-year, analysts expect $2.18 a share, while the company expects $2.10-$2.20 per share.

Carnival shares were trading at a one-year high, up 26 cents to $48.31 in early afternoon trading Friday on the New York Stock Exchange.

I went on a 5 day Carnival cruise about 2 yrs ago and hated it. I know, I know, I am the minority. There is a reason they call it Carnival - it is a constant zoo with no place or time when there is peace and quiet - not even in your room. Or in the library because a major part of the day they would hold these silly seminars on skin care or whatever and the internet cafe was also in there. The beds in the room are horrible. They are barely twin size 4 inch soft mattresses placed on plywood. I decided that the way they hire a cruise director is to find someone with a severe case of ADD. Then they give him a microphone which pipes throughout the entire ship - including your room - and then they take away his ritalin! Egad!! It was awful. And the boat we were on was loud to boot. In the informal dining area, the noise of the boat was so loud, you had to shout at the tables to be heard by the people right next to you. Of course, it the boat noise wasn't too loud, the music from the poolside right outside you would have had to talk very loud to talk over it.

When you are docked, the outings that you can do are very much like just herding cattle around besides being over-priced. My daughter and I went snorkeling and if you went too slow, they would basically push you along and yell at you. And they didn't go at a leisurely pace either.

But the food was not too bad, even though they bring it all on board the first day. The atmosphere and the service in the dining room were very good. But that was the ONLY part of the whole trip that I liked.

Despite all of that, I did tell my husband that I would consider an Alaskan cruise for our 25th next year - if it was NOT Carnival lines and not almost 4 days of no land in sight.

Since you asked, I'll give you my take.

I'm 'tight', some call me cheap, but I prefer frugal.

I'd rather spend my money where it benefits ME; so with this in mind, here's my advise.

1) Drive down the night before, and rent a room at the Economy Inn on 'G' or 'J' street. I forget which street. Check in the night before, tell them you are leaving for the week on the Elation; and you can stash your car there FREE. Take a taxi, avoid the traffic jam/stress and tip graciously.

2) Maui Jim Sunglasses. Ebay is your friend. The Mediterainian sun is harsh, and Maui Jim's are wonderful. You can get substancial discounts on sunglasses on Ebay, plus they look great.

3) Book your excursions (if you want them) through Carnival. Yes, they cost a wee bit more than booking by yourself; but if the bus get's a flat tire and you booked the trip yourself, the boat doesn't wait. You are now stranded in a foreign country, with limited money, without your passport, and life will suck.

4) Sunscreen, shorts, light shirts, and relax.

5) Seasickness pills. Get'em at Walmart. The Elation is VERY smooth, it has some fantastic counter-rock mechanisms built into the ship, but there is a gentle side to side rocking. You may feel a wee bit squimish, then again you may not. Better to buy a box of pills at WalMart, just in case.

6) Expect to be pampered like you have never known pampering before. Also expect to pay a VERY reasonable tip for said pampering. If Coke is your thing, as soon as your board go buy the 'Soda Card' for ~$40. It's good for unlimited soda's the entire trip. Othewise, it's $2 per glass (not quite a can, but always served with a smile).

7)Don't overpack. 3 pairs of shorts and 3 pair of long pants (evening meals) and 1 suit (formal night). Light shirts are the order for the day. The evening meal is very nice; I'd suggest requesting Early Dining. Typically shorts and T-shirts are a 'faux pa'. Lobster night is typically a Tuxedo affair, we didn't do Formal night (and I have paid for that numerous times!!!), you can rent a suit on board, or bring your own suit. If you don't do the Formal Night, prepare to be basically bored; as the ships entertainment that whole night revolves around the Formal attire.

8) Pack a empty duffle bag in your stuff. You WILL fill it.

9) Mexico, Belize and Cozumel have great rates on jewelry. You can save a bundle. You can also get your Rx cheap. We stock up on basics, like Augmenton (antibiotics), Burn Cream, Fungacides - these are non-narcotic, non-addictive, cheap, store a long time, and are only available with a perscription in the USA. You can get these in Mexico for next to nothing. Face it, you know when you have burned yourself, you don't need an MD to tell you. So, why pay $20 to have a MD say, "Yep, I bet that smarts", then pay another $20 for a small tube of burn cream, when you can buy the big tube for $8? Same thing with Antibiotics, you know when you have the creeping crud.... or Athlete's foot, or skin rash ....

10) Wheeled luggage is your Friend. Carry your own bags off the boat, and avoid the crush of 400 people digging through piles of luggage.

11). Exit the boat, back at Galveston, rested, relaxed and pleasantly re-charged, hail a taxi (instead of fighting for the hotel shuttles), let the driver deal with the stress of traffic, get your car back at the Econo Lodge, tip the taxi driver graciously, and know you have maximized the fun, avoided the parking mess, and have maximized your fun.

12) Carnival has a duty-free shopping 'mall' onboard. They garrantee the prices on whatever you buy to be the cheapest you will find ANYWHERE for a period of 1 year. I bought 2 Citizen watches that MSRP for ~$600 for between $225 - 250. Best price I've seen in stores in the USA has been in the $450-500 range. Very satisfied. Bought a ruby ring for the wife, natural ruby for about half of what we can find it here.

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