With all the companies citing the war for poor performance these days, one business you'd think would be affected has held up surprisingly well.
Miami-based Carnival
Though business was solid, the world's largest cruise operator didn't go perfectly unscathed. Where Carnival's non-P&O Princess gains came from a 19% increase in stand-alone capacity, the Iraqi war caused a loss of pricing power. Thus, pro forma net revenue yields -- or net cruise revenue per available lower berth day -- declined 3.4% year over year.
Nonetheless, "pricing for the summer season recovered more quickly than expected," as the company had forecasted a 4%-6% decline back in June.
During the quarter, the company launched four new ships under four of its 13 brands. Two of these new ships -- Costa Cruises's 2,114-passenger Costa Mediterranea and Holland America's 1,848-passenger Oosterdam -- operate in Europe. Perhaps it's encouraging to think that Americans still want to travel. Or maybe we all just have a price.
Looking ahead, the company said that while bookings are strong, pricing power is still weak. In the fourth quarter, Carnival expects a 4%-6% year-over-year decline in net revenue yields. However, the company also expects net cruise costs per available berth day to decline, as synergies are realized from the merger.
Carnival expects fourth-quarter earnings between $0.24 and $0.28 per share. Its shares remain mostly unchanged after this morning's report.
