Page 22: of Maritime Reporter Magazine (July 2001)

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Cruise Shipping Annual

Carnival's 2Q Earnings Drop

Eight Percent

Carnival Corp. reported that fiscal sec- ond-quarter profits dropped eight per- cent, in line with expectations, as prices for sea vacations remained tepid.

The Miami-based owner of Holland

America, Cunard and four other cruise lines said profits were SI87 million, or $0.32 per share, for the three months ended May 31, compared with $204 million, or $ 0 34 per share, a year earli- er.

Industry analysts had forecast that

Carnival, whose 45 ships dominate the $12 billion global cruise market, would earn between $0.28 and $0.33, accord- ing to a survey of 19 analysts by Thom- son Financial/First Call. The analysts' median estimate was $0.30.

Revenues were $1.08 billion, up from $875.1 million a year earlier, as Carni- val added ships in a massive, sectorwide fleet expansion analysts partly blame for weak cruise ticket pricing. The slow- down in the U.S. economy is also drag- ging demand for cruises.

The company, described as "reason- able" analysts' estimates for the full fis- cal year ending in November. The com- pany gave no figure, but First Call's mean full-year estimate for Carnival is $1.65 a share, or a penny more than last year.

The company reported that net yield, a measure of revenue per passenger close- ly watched by Wall Street, had risen 1.8 percent in the quarter over the same three months in 2000. Chairman Micky

Arison said yields were likely to be down two to three percent over last year in the six months to November. "In spite of the continuing weak eco- nomic environment, we were still able to achieve strong growth in the operat- ing earnings of our cruise brands," Ari- son said. "A combination of an 8.4 percent increase in capacity, a 1.8 percent increase in net revenue yields (revenue per available berth day), and lower operating cost per available berth day helped to drive the growth in our second quarter operating earnings."

Operating income, including the con- solidation from the company's Costa

Cruises based in Italy, rose 20.2 percent in the quarter to $241.1 million from $200.7 million.

Arison said slow economic growth in the United States was still weighing on cruise ticket prices, especially for the company's most expensive lines such as

Seabourn. More modestly priced lines were a bright spot, he said. "The North American contemporary cruise segment continues to perform quite well despite teh slowing economic environment, Arison said.

Carnival, whose lines also include

Windstar and Carnival Cruise, announced in May that it was selling for approximately $500 million a 25 per- cent equity stake in Airtours pic.

New Marine Fire

Suppression Systems Receive

USCG Approval

Fike Corporation has been granted

U.S. Coast Guard Approvals for its

Marine FM-200 and C02 Fire Suppres- sion Systems.

An effective option for many ship- board and offshore applications, such as machinery spaces, generator rooms, pump rooms and electrical areas, Fike systems provide the flexibility to apply safe, environmentally friendly extin- guishing agents when required.

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