Shares of cruise operator Carnival (NYSE: CCL) were trading down more than 6% on Tuesday morning after the company cut its full-year profit forecast due to higher fuel prices and the impact of a strong dollar.
Carnival reported fiscal first-quarter adjusted earnings of $0.49 per share on revenue of $4.7 billion, beating expectations for $0.44 per share in earnings on sales of $4.31 billion. But the market was more focused on the company's guidance for the rest of the year. Carnival said it expects second-quarter adjusted EPS between $0.56 and $0.60, short of the $0.72 analyst estimate.
A Carnival cruise ship sets sail. Image source: Carnival.
For the full year, Carnival expects earnings of $4.35 to $4.55 per share. The company had previously guided for $4.50 to $4.80.
While energy and forex issues are weighing on the business, demand remains strong. Carnival said it expects constant-currency net cruise revenue to be up about 5.5% in fiscal 2019 on cumulative advanced bookings that are trending up year over year.
Shares of Carnival have been taking on water for some time now, trading down nearly 20% over the past year. The company is doing a great job of attracting customers for its cruises and offers a tantalizing 3.8% dividend yield. But right now, investors seem more focused on the issues that are weighing on profitability.
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