NEW YORK (AP) - Carnival slashed its profit expectations for the year with rising fuel costs and a strong dollar squeezing the cruise company.
Shares slumped 9 percent Tuesday after the pessimistic outlook overshadowed an otherwise strong first quarter.
Crude prices have jumped 30 percent this year and the cost for a barrel is now pushing $60.
Rising costs were exacerbated by the strong dollar because the company does so much business outside of the U.S. Foreign currency earned during the quarter must be converted to dollars, which diminishes company returns.
CEO Arnold Donald said fuel costs and currency issues will skim $155 million, or 22 cents per share, from the company’s overall profit in 2019.
Carnival now expects full-year profit of between $4.35 and $4.55 per share, down from earlier forecasts of profit between $4.50 and $4.80 per share.
Industry analysts had been projecting an annual profit of $4.76.
The Miami company’s first-quarter profit fell 8.5 percent to $336 million, or 48 cents per share. That’s better than the 44 cents Wall Street had expected, according to a survey by Zacks Investment Research.
Revenue rose 10 percent to $4.67 billion as the company added more passengers who spent more onboard cruises. That also beat analyst expectations.
The quarterly results beat Wall Street expectations for 44 cents per share in profit on $4.3 billion in revenue.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CCL at https://www.zacks.com/ap/CCL
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