Wall Street Worries About Cruise Fleet Pricing
The big cruise lines have been steadily filling their rapidly expanding fleets with passengers looking to escape an especially harsh North American winter, but as they get ready to release quarterly results, Wall Street is worried that ticket prices may not be high enough. Analysts are expecting profit declines for the winter quarter from the top three cruise lines, starting with industry leader Carnival Corp., which plans to release its fiscal first-quarter results on Wednesday (March 21, 2001). Cruise stocks, including those of Royal Caribbean, the world's No. 2 operator, and Britain's P&O Princess Cruises, which ranks third, have in recent weeks given up much of their bounce back gains after a sustained decline last year.
P&O Cruises Looks To Boost Yield
P&O Princess Cruises, the world's third largest cruise operator, said lower holiday prices would cut revenue yields this year, but added it still hoped to boost earnings by cost cuts and lower tax rates. P&O Princess reported a slight fall in second quarter pre-tax profits to $93.8 million from $95.2 million a year ago, but earnings per share rose seven percent to 12.9 cents. Lower prices led to the fall in pre-tax profits, and P&O Princess Cruises added in a statement that pricing remained "competitive" in its key North American market, which counts for 75 percent of group turnover. The company added it expected overall like-for-like net revenue yields -- a measure of how much money the company makes per passenger -- to fall three percent during the year.
