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Carnival lowers forecast, leaves Europe

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Staff writer ▼ | May 22, 2013
Carnival Cruise LinesCarnival Corporation, the parent company of Carnival Cruise Lines, lowered its earnings guidance for the second half of 2013, primarily due to lower net revenue yield expectations.

The company expects full year 2013 net revenue yields to be down 2 to 3 percent compared to the previous flat yield guidance for the year. In addition, voyage cancellations beyond those incorporated in the company's previous earnings guidance, as well as increased selling and administrative costs, are expected to reduce earnings by approximately $0.10 per share.

Based on the above factors, as well as current fuel prices of $674 per metric ton and currency exchange rates of $1.30 to the Euro and $1.53 to the pound, the company now expects full year 2013 EPS to be in the range of $1.45 to $1.65 compared to its previous earnings guidance range of $1.80 to $2.10.

The company continues to expect second quarter 2013 EPS to be in the range of $0.04 to $0.08 per share despite slightly lower yield expectations.

At the same time, Carnival Cruise Lines notified travel partners in the United Kingdom and Ireland announcing it would be redeploying ships in the region to other ports.

In the letter, Adolfo Perez, Carnival's Managing Director for the U.K. and Ireland, cited "market conditions, increasing air fares, and the fact that most of guests are from the U.S." as the reason for the move.

"We have decided not to deploy a Carnival ship to Europe in 2014. Carnival continues to be committed to the UK and Irish markets," added Mr. Perez.

Carnival has one ship deployed in the region, Carnival Legend, which sails Baltic and Mediterranean cruises from the U.K. and Barcelona. Carnival Sunshine is sailing the Mediterranean until November, and the company will re-deploy Carnival Legend seasonally out of Sydney, Australia, in 2014.

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