Carnival (CCL) Steady after Results
Carnival Corp. (NYSE:CCL) shares are steady in morning trade after the company reported a wider than expected loss. The company’s results were affected by grounding costs of the Costa Concordia off Italy that killed 25 people.
Carnival (CCL) reported a net loss amounted to 18 cents a share. This compares with a profit of $152 million, or 19 cents a share, a year earlier. This was wider than the 7 cents a share loss expected by analysts. First quarter 2012 results reflect Costa Concordia incident expenses of $29 million, including a $10 million insurance deductible related to third party personal injury liabilities.
Carnival (CCL) now expects net income of between $1.40 and $1.70 per share for the full year. This is sharply down from its earlier forecast of $2.55 to $2.85 per share. Revenue for the year after expenses is expected to fall as much as 4 percent.
Carnival Corporation & plc (CCL) Chairman and CEO Micky Arison noted, “All of us at Carnival Corporation & plc are deeply saddened by the Costa Concordia tragedy. Our hearts go out to everyone affected, particularly the families of the deceased and missing. The global cruise industry has an outstanding safety record and every one of our brands is committed to the well-being of our guests and crew.”
“Immediately following the Costa Concordia accident we ordered a thorough review, with the help of industry-leading experts, to understand what happened as well as to conduct an extensive audit of all safety and emergency response procedures across all of our cruise lines. We will work tirelessly to understand what went wrong, and make sure it never happens again.”
The first quarter typically accounts for 10 percent of annual profit, Rachael Rothman, an analyst with Susquehanna Financial Group in Bala Cynwyd, Pennsylvania, wrote in a report yesterday. The greater concern is bookings. European cruise prices have weakened since the Concordia accident, with second- quarter rates falling 15 percent, she said.
“Visibility remains extremely limited, further earnings downgrades are possible, the risk profile has increased and we are nervous that investors seem to assume a quick return to normality,” Joel Simkins, a Credit Suisse analyst in New York, said in a report yesterday.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht. |