(Adds details, analyst comment, updates shares)
By Devika Krishna Kumar
Dec 19 (Reuters) - Carnival Corp, the world’s largest cruise operator, said Cuba would present “a tremendous opportunity” if the United States ended its economic embargo on the Caribbean nation.
The United States and Cuba said on Wednesday they would restore diplomatic ties, the biggest step towards normalizing business relations since Washington severed them five decades ago.
“We are excited about the prospect for Cuba,” Carnival Chief Executive Arnold Donald said on a conference call following the release of the company’s fourth-quarter results.
“There’s a lot of pent-up demand to visit Cuba,” he said.
The company’s shares rose 3.5 percent following Wednesday’s news. They fell as much as 2 percent in early trading on Friday after the company announced lower-than-expected quarterly sales.
Carnival has been facing intense competition in the Caribbean, its largest market, as rivals such as Europe-based MSC Cruises slash prices to attract customers.
Carnival, which has its U.S. headquarters and operational base in Miami, said cruises to Cuba would allow for “very fuel-efficient itineraries.”
Donald said there were about 11 ports in Cuba that could accommodate Carnival’s ships but added that the country would require investments in ports and other infrastructure.
Analysts agreed on Cuba’s potential for cruise operators.
“I think that (Cuba) is the single greatest, fastest opportunity for the industry,” independent industry analyst Stewart Chiron told Reuters.
Carnival reported a loss of $102 million, or 13 cents per share, for the quarter ended Nov. 30, compared with a profit of $66 million, or 8 cents per share, a year earlier.
The company, which has also been hurt by the strong dollar, took a charge of about $312 million, mostly related to fuel derivatives.
Excluding items, the company earned 27 cents per share.
Revenue rose less than 2 percent to $3.72 billion.
Analysts on average had expected a profit of 20 cents per share and revenue of $3.81 billion, according to Thomson Reuters I/B/E/S.
Carnival said it expected net revenue yields, which combine ticket sales and money spent onboard, to rise no more than 1 percent in the first quarter on a constant-currency basis.
This is expected to restrict growth in net revenue yields to 2 percent in fiscal 2015, the company said.
Carnival forecast a profit of 7-11 cents per share for the first quarter. Analysts on average were expecting 10 cents.
Carnival’s shares were up 0.8 percent at $44.86 in afternoon trading. (Reporting by Devika Krishna Kumar in Bengaluru; Editing by Kirti Pandey and Saumyadeb Chakrabarty)