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Warburg Slashes Earnings of Top Cruise Players

Maritime Activity Reports, Inc.

April 17, 2001

UBS Warburg on Tuesday cut its earnings estimates for the cruise operators it covers, including Royal Caribbean and Carnival Corp.

A UBS analyst cut the full-year 2001 earnings estimate for Royal Caribbean to $1.87 from $2.21, and lowered the 2002 estimate to $2 from $2.36. Farley assigned Royal Caribbean shares a 12-month price target of $23, down from $27.

The analyst lowered estimates on Carnival Corp. to $1.74 from $1.78 for 2001 and $1.96 from $2.00 for 2002.

"We believe that the stock's recent weakness already reflects concerns about the economy and particularly given that we expect the stock will take a hit in Tuesday's trading, the risk/return at these levels still makes the stock attractive, in our view. We continue to believe that the long-term growth of CCL makes the stock attractive," the analyst said in a research note. Shares of Royal Caribbean closed at $21 in New York Stock Exchange trading on Monday, while those of Carnival closed at $27.32.

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