Fuel prices, the US dollar take off, and drag on Carnival

Combined Shape

NEW YORK (AP) — Carnival slashed its profit expectations for the year with rising fuel costs and a strong dollar squeezing the cruise company.

Shares slumped 9 percent Tuesday after the pessimistic outlook overshadowed an otherwise strong first quarter.

Crude prices have jumped 30 percent this year and the cost for a barrel is now pushing $60.

Rising costs were exacerbated by the strong dollar because the company does so much business outside of the U.S. Foreign currency earned during the quarter must be converted to dollars, which diminishes company returns.

CEO Arnold Donald said fuel costs and currency issues will skim $155 million, or 22 cents per share, from the company’s overall profit in 2019.

Trending:
US Chamber of Commerce Defies Biden, Calls for Termination of Weekly Unemployment Perk

Carnival now expects full-year profit of between $4.35 and $4.55 per share, down from earlier forecasts of profit between $4.50 and $4.80 per share.

Industry analysts had been projecting an annual profit of $4.76.

The Miami company’s first-quarter profit fell 8.5 percent to $336 million, or 48 cents per share. That’s better than the 44 cents Wall Street had expected, according to a survey by Zacks Investment Research.

Revenue rose 10 percent to $4.67 billion as the company added more passengers who spent more onboard cruises. That also beat analyst expectations.

The quarterly results beat Wall Street expectations for 44 cents per share in profit on $4.3 billion in revenue.

_____

Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CCL at https://www.zacks.com/ap/CCL

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

Truth and Accuracy

Submit a Correction →






We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

Tags:
The Associated Press is an independent, not-for-profit news cooperative headquartered in New York City. Their teams in over 100 countries tell the world’s stories, from breaking news to investigative reporting. They provide content and services to help engage audiences worldwide, working with companies of all types, from broadcasters to brands.
The Associated Press was the first private sector organization in the U.S. to operate on a national scale. Over the past 170 years, they have been first to inform the world of many of history's most important moments, from the assassination of Abraham Lincoln and the bombing of Pearl Harbor to the fall of the Shah of Iran and the death of Pope John Paul.

Today, they operate in 263 locations in more than 100 countries relaying breaking news, covering war and conflict and producing enterprise reports that tell the world's stories.
Location
New York City




Conversation