Carnival Corporation has said strong pricing in the late market in its first quarter led to a better than expected performance.
The quarter to February 28, 2010, saw the world’s largest cruise operator achieve revenue of $3.1 billion translating into a net income of $175 million.
The operator said increased fuel prices masked the strength of its performance but that net revenue yields were better than expected and unit costs lower than anticipated.
Micky Arison, Carnival chairman and chief executive, said: “we are very encouraged by our results as pricing continued to rebound off last year’s lows and we returned to top line revenue growth after a challenging 2009.
“During the quarter, the booking environment continued to improve for our North American brands and we achieved stronger than expected pricing on close in bookings.
“In addition we continue to realise significant cost savings worldwide, though the strength of our performance was masked by rising fuel prices.”
The first quarter performance benefitted from the sale of P&O Cruises’ Artemis, the line’s smallest ship that will be replaced by Adonia when it joins from Princess Cruises’ fleet next year.
Carnival gave an upbeat assessment for the year ahead saying booking volumes for the remaining three quarters were running ahead of 2009 with “prices significantly higher than last year’s discounted levels”.
“Wave season bookings were fuelled by attractive pricing in the marketplace and pent up demand from those who postponed vacations last year,” Arison added.
“As a result, pricing continues to increase, particularly for the peak summer season. Having achieved significantly higher pricing, we expect revenue yields for the remaining three quarters of the year to increase approximately 3% to 4% (in constant dollars) compared to last year.”
Carnival expects full year net revenue yields to increase 2% to 3%, up from the 1% it predicted in an update in December. Costs, excluding fuel are now projected to be down 2% to 3%, compared to the 1% to 2% it stated in December.
Both fuel prices and the strengthening dollar are now expected to reduce earnings by a cumulative value of around £200 million. Based on the current fuel price the operator is projecting to spend $483 million more on fuel than in 2009.