Carnival Signals 2006 Shortfall

Cruise operator Carnival (CUK - Cramer's Take - Stockpickr) said Friday its fourth-quarter earnings jumped 20%, despite a brutal hurricane season and spiraling fuel costs.

The company posted net income of $353 million, or 43 cents a share, on revenue of $2.6 billion. Analysts polled by Thomson First Call expected Carnival to earn 41 cents a share on revenue of $2.53 billion.

Carnival had a profit of $294 million, or 36 cents a share, with revenue of $2.2 billion in the same period a year ago. The company attributed its 14.4% increase in fourth-quarter revenue to higher cruise revenue yields and a 9.1% gain in cruise capacity. Partly tempering the improvement was the strength of the dollar compared with the British pound and the euro.

"It is a testament to the resilience of our cruise business, that despite an approximate 50% increase in fuel costs for the quarter and the worst hurricane season in our history, we were still able to grow earnings by 20% to achieve record fourth quarter results," Carnival Chairman and CEO Micky Arison said in a statement.

Net income for the full year was $2.3 billion, or $2.70 a share, on revenue of $11.1 billion, compared with earnings of $1.9 billion, or $2.24 a share, with revenue of $9.7 billion in 2004.

For next year, Arison said "we expect continued revenue yield growth in 2006, although probably not at the level experienced during the last two years. As it stands today, advance booking levels for 2006 are ahead of the prior year on a capacity-adjusted basis, with average pricing also higher than last year."

Carnival forecast a profit of between $3 and $3.10 a share in 2006, with first-quarter earnings ranging from 34 cents to 36 cents. Analysts have forecast earnings of 45 cents a share for the first quarter and $3.14 a share for the full year.

Shares of Carnival were down a $1.01 to $56.14 in recent trading.

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