Carnival reports positive third quarter results

With results coming in ahead of expectations, we expect Carnival to enjoy a significant boost in profitability as the economy recovers

Warren Miller 23 September, 2009 | 10:42AM
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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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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Carnival PLC1,533.00 GBX-1.54Rating

About Author

Warren Miller  Warren Miller is a senior quantitative analyst at Morningstar.

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