Cruise line Carnival has warned that rising fuel prices and unfavourable exchange-rate movements are likely to cut full-year earnings.
Carnival’s warning initially hit its shares, which are the only company stocks to feature in both the FTSE 100 Index in London and the Standard & Poor’s 500 in the US. But they rallied mid-morning in London, up 4.53%, or 191p, at 4,406p.
Another strong quarter
Both US and London-listed shareholders have equal entitlements, but the London shares are separately quoted. Shares in other cruise market operators were caught in the backwash of the Carnival report, with declines for stock in Norwegian Cruise Line and Royal Caribbean Cruises.
Carnival’s president and chief executive officer Arnold Donald took an upbeat line in unveiling the results. He said: "We delivered another strong quarter, again achieving record adjusted earnings on record revenues and exceeding the high end of our guidance range. Strong operational execution drove a 30% increase in adjusted earnings, affirming the strength of our core strategy to create demand that outpaces measured capacity growth through outstanding guest experience efforts coupled with innovative actions to increase consideration for cruising across all global markets."
However, gross costs, including fuel, per ALBD rose 8.2%, although excluding fuel and discounting the effects of currency movements the rise in costs was 3.6%, “better than the March guidance of up 4% to 5%”.
Carnival said that highlights from the second quarter included the delivery of Carnival Cruise Line's 26th ship in its fleet, Carnival Horizon,in March and, in April, its Seabourn subsidiary took the delivery of the fifth all-suite ship in its luxury fleet, Seabourn Ovation.