Carnival, higher prices, higher revenue; shares rise

NEW YORK (Reuters) - Carnival Corp(CCL.N) (CCL.L) predicted a better-than-expected second quarter on Tuesday, based on higher prices for cruise vacations, sending its stock to its highest level since September 2008.

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For the second quarter, Carnival expects earnings between 26 cents and 30 cents a share. The average analyst estimate is 24 cents per share, according to Thomson Reuters I/B/E/S.

The world's largest cruise operator has seen an 8 percent increase in cruise bookings for the next three quarters. Prices jumped 17 percent during the last nine-week period.

"I think we are surprised by the strength of pricing that has come back this year," Chief Operating Officer Howard Frank said on a call with analysts. "Whether we can sustain the booking volumes is the next question."

Carnival's shares gained 1.7 percent to $38.57 in late morning trading on the New York Stock Exchange. It touched an early high of $39.35.

For the full year 2010, Carnival projected earnings of $2.25 to $2.35 per share. Analysts project earnings of $2.26 a share.

Last month, Carnival said it would increase prices as much as 5 percent for summer sailings on its Carnival Cruise Lines. In the past year, cruise operators have cut prices to fill their ships.

"Pricing should continue to improve throughout the year as (Carnival) pushes through price increases," Stifel Nicolaus analyst Steven Wieczynski said in a research note. "Cost controls continue to impress."

HIGHER FUEL HURTS Q1 PROFIT

For the fiscal first quarter, Carnival posted net income of $175 million, or 22 cents per share, down from $260 million, or 33 cents per share, a year earlier.

Revenue rose to $3.1 billion from $2.9 billion.

"In addition, we continue to realize significant cost savings worldwide, though the strength of our performance was masked by rising fuel prices," Chairman and Chief Executive Micky Arison said in a statement.

Higher fuel prices cost the company 22 cents per share, Chief Financial Officer David Bernstein told analysts. The company's costs in 2010 are expected to be 3.5 percent to 4.5 percent higher, driven higher by higher oil prices.

The company said it was trying to cut back on its fuel usage. In the first quarter, fuel consumption per available lower berth day fell 3.1 percent.

Available lower berth day measures both the number of passengers on a cruise as well as the length of the trip.

(Reporting by Deepa Seetharaman; additional reporting by Leah Schnurr; editing by Maureen Bavdek)

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