Yesterday, Carnival reported better than consensus results for its first quarter. Diluted EPS of US$0.22 for Q1 are lower than the previous year's US$0.33 Q1, hit by an 80% increase in fuel prices. Encouragingly, both bookings and pricing are back on an up-wave, particularly for the peak summer season. Management has raised its mid-point EPS guidance for FY10 by 20 cents to US$2.30. This better environment was foreshadowed by the resumption of quarterly US$0.10 dividend payments announced in January. However, following the strong rise in recent months, we view the share price as close to catching up with events.

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