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Carnival's profit down on higher energy costs

/ Source: The Associated Press

Carnival Corp., the world's largest cruise operator, reported Thursday its first-quarter profit fell 19 percent, weighed by a spike in fuel costs.

For the fiscal quarter ended Feb. 28, Miami-based Carnival reported net income of $280 million, or 34 cents per share, versus a prior-year profit of $345 million, or 42 cents per share. Revenue edged up to $2.46 billion from $2.4 billion in the year-earlier period.

Miami-based Carnival, whose 12 brands include Princess Cruises and Holland America Line, said fuel prices rose 63 percent, leading to an $82 million increase in fuel costs.

"Excluding these significantly higher fuel costs, the company performed well during the quarter," chairman and CEO Micky Arison said in a statement.

The company forecast earnings of 48 to 50 cents per share for the second quarter, and from $2.90 to $3 per share for the full year 2006. Analysts expect earnings per share of 57 cents for the quarter and $3.09 for the year.

Carnival forecast higher fuel prices will cost the company $60 million in the second quarter. Fuel prices for the rest of the year would be about 20 percent higher than the prior-year period, but comparisons would moderate over the rest of the year, the company said.

It also said it was looking for ways to reduce fuel consumption.

In a conference call, Howard Frank, vice chairman and chief operating officer, said the company is seeing weaker Caribbean bookings. Last year's hurricanes were also behind some of the decrease in bookings because they damaged ports in New Orleans and Cozumel, Mexico.

"Alaska, Europe and exotic cruises are faring quite well," he said.

Carnival's brands operate 80 ships with about 139,000 lower berths. Fifteen new ships are scheduled to enter service between June 2006 and the fall of 2009.