Carnival Cruise Lines Shocks Investors With Hefty 2nd Quarter Gains

You don’t need to be a genius to know that Carnival Cruise Lines has been having a rough year and a half.  When the Costa Concordia went down in January 2012 it took a lot of the company’s revenue and popularity with it, and since then the company has been trying to win back public favor by offering as many discounts as possible.  Despite cutting ticket prices, giving free upgrades, and cross honoring cruise tickets Carnival Cruise Lines is still struggling to win back customers.

Despite the fact that people are avoiding being stuck a ship that could cover them in feces, the cruise company actually had a pretty decent 2nd quarter.  Despite two ship disasters occurring with months of one another, Carnival Cruise Lines managed to earn $41 million for their second quarter profit.  Their earnings more than surpassed the modest estimates most financial experts predicted, even though their bookings for 2013 are far less than they were in 2012.  Some of their success may have to do with the amount of companies they know.  Most people don’t want to take a cruise with Carnival, but they would be more than willing to set sail with Holland America and Princess.  Those two cruise companies are owned by Carnival Cruises, but since they don’t heavily advertise with the Carnival name most consumers think they’re vacationing with a totally different company.  Fuel costs dropping by 10% also probably didn’t hurt their profits either.

It seems like their discounts have helped keep the company afloat for now, but some investors think that their extensive discounts will cause problems in the future.   Carnival Cruises can’t keep winning the public back with discounts, eventually they’ll have to start charging full price is they want to continue being profitable in the long run.  The company is fully aware of the problem, which is why they’re planning on rolling out a massive marketing campaign in the upcoming months.  The company just finished putting the finishing touches on refurbishing the Triumph, and they’re ready to get back to business as usual.