Cruise company Carnival
have reported better-than-expected third-quarter results. Revenue
declined 14% below the third quarter of 2008 numbers mostly because of a
20% drop in ticket pricing and a 10% drop in onboard spending per
passenger. As Carnival managed to cut most of its operating costs in
proportion to the decline in revenue, its operating margin contracted
only 190 basis points to 29%. Carnival's management team noted that it
has seen evidence that consumers are expanding their booking window,
which will provide an immediate boost to revenue regardless of the
presence of any incremental demand. Barring
any large fluctuation in the
two uncontrollable factors that affect Carnival's operations, the
economy and fuel prices, we expect Carnival to enjoy a significant boost
in revenue and profitability as the economy recovers.
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