Carnival beats on cost cuts, solid pricing

By Deepa Seetharaman

NEW YORK (Reuters) - Carnival Corp & Plc (CCL.N: Quote, Profile, Research) posted a quarterly profit that beat analysts' estimates helped by better-than-anticipated pricing and lower net cruise costs, driving shares up nearly 9 percent in midday trading.

The world's largest cruise operator reported net income of $264 million, or 33 cents a share, in the second quarter compared with $390 million, or 49 cents a share, a year ago.

The earnings beat consensus estimates of 28 cents per share, according to Reuters Estimates. They were also better than the Miami-based company previously forecast in April when it reassessed its estimates to reflect the H1N1 flu outbreak.

Total revenue for the quarter was $2.9 billion, down about 15 percent from a year ago.

"What is very encouraging is that, since the end of March, everything is trending up right through the travel advisory, both volumes and yields," Carnival Chief Executive Micky Arison said during a conference call with analysts.

"So we're encouraged by that. Whether that will be sustainable, time will tell."

Carnival shares were up $2.07 at $25.12 at midday on the New York Stock Exchange. The shares of Rival Royal Caribbean Ltd (RCL.N: Quote, Profile, Research) jumped 6 percent, or 77 cents, to $13.31.

Including fuel, net cruise costs dropped 9.6 percent on a constant dollar basis. Carnival said on Thursday that booking volumes for the second half of 2009 so far were 26 percent higher than in 2008. Costs and expenses were down nearly 13 percent compared with a year earlier