This summary is based on the second quarter fiscal 2008 earnings call conducted by Carnival Corp. (CCL: chart) on June 19, 2008.

Management:

CEO: Micky Arison
Sr. VP and CFO: David Bernstein
COO: Howard Frank
VP, IR: Beth Roberts

Key Investor Issues:

- Quarterly revenues increased by 17.2% to $3.4 billion.
- Q2 EPS were 49 cents versus 48 cents in the year ago quarter.
- Q3 EPS are forecast to be in the range of $1.56 to $1.58.

Second-Quarter Financial Highlights:

The second quarter EPS were above the mid point of the March guidance by 6 cents per share.

- This was due to higher than expected cruise ticket revenues from the North American brands which resulted from stronger last minute bookings.
- This was partially offset by the lower than expected on-board spending at the contemporary brands and some of the premium brands, worth about 2 cents per share.
- The Q2 EPS were also driven by lower than expected SG&A worth 25 cents per share as the company brands buckled down.
- Lastly, the EPS was helped by lower than expected fuel consumption worth about 1 cent per share.

The quarterly capacity rose by 8.3%.

- The vast majority of the increase was through the European brands which grew 23%.
- The North American brands grew 2.7%.
- The overall net revenue yield in current dollars increased 7.3% versus last year quarter.

The net cruise passenger ticket recorded a yield improvement of 9.3% in current dollars and 5.5% in local currency.

- The North American brands increased 7.6% driven by the Caribbean, Europe and other exotic itineraries.
- The European brands achieved a 0.6% increase in local currency passenger ticket yields.
- This is excluding the Ibero Cruises JV which the company began consolidating in Q4 of last year and Swan Helenick which ceased operations during Q2 of last year.
- P&O Cruises Australia achieved a healthy yield increase versus the prior year quarter.
- Costa’s yield in China improved markedly during the quarter driven by both price and occupancy resulting from the decision to shift sourcing strategy from Costa Asia.

In on-board and other yields, yield improvement was 1% in current dollars but a yield decline of 1.8% in local currency.

- According to the management, mix accounts for 1% of the decline due to faster growth in European brands than in North American brands.
- The 0.6% of the decline was from the inconsistent brands being Ibero Cruises, Windstar and Swan Helenick.

The cruise costs per available lower berth increased 10.8% during the quarter.

- In local currency, the costs per available lower berth rose 7.2% due to fuel prices.
- Q2 fuel prices were 59% higher resulting in an additional $58 million or 19 cents per share in costs to the company.
- Excluding fuel, local currency cruise costs per available berth per day were down 1.1%.

In North America, bookings held up reasonably well in a soft economy.

- However, the bookings were slower versus the year ago strong levels.
- The pricing for late bookings was satisfactory.
- According to the management, the absolute volume of bookings is sufficient to maintain the higher prices.
- As a result the company maintains its guidance for the second half of the year as given in the last quarter.
- The management expects ticket prices to be slightly higher than last quarter’s guidance, partially offset by forecasted lower on-boards.
- The company believes that booking patterns suggest customers are looking for less expensive vacations and at good values.
- There is continued strength in the shorter cruises and a slightly slower booking pattern for the longer voyages.
- The pricing for North American brand at Europe and Alaska itineraries in the second half of the year is expected to be lower year-over-year.
- The lower Alaska pricing may be partly due to the $50 head tax in Alaska.
- The European itinerary pricing for North American brands, though lower than a year ago, has held up reasonably well especially in light of the significant increase in Europe capacity to both company and competitor brands.

The European brands recorded capacity increase of 21% in the second half of the year.

- The management has modestly reduced forecasted revenue yields for ticket and on-board revenues.
- The European businesses are performing well and the management is pleased with their ability to expand their markets and maintain relatively high price points for their cruise products.