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Carnival 1Q results top analysts' estimates, but 2Q forecast misses Wall Street's expectations

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MIAMI — Carnival swung to a loss in its first quarter, stung by losing bets on future prices for fuel.

The cruise operator's adjusted results and revenue beat analysts' expectations, but it narrowed its full-year forecast and gave a second-quarter projection below Wall Street's view.

Its stock declined more than 3 percent in Tuesday morning trading.

Carnival is trying to bounce back from a series of high-profile incidents. It is contending with lawsuits stemming from a February 2013 Carnival Triumph cruise that went awry after a fire disabled the engine. And in 2012 the Costa Concordia hit a reef off Giglio island and killed 32 passengers and crew. Costa is a unit of Carnival.

Carnival has been using discounts to get passengers back onto its ships. It has also been reaching out to travel agents, launched a new ad campaign and issued a hassle-free vacation guarantee.

President and CEO Arnold Donald said in statement that first-quarter ticket prices were better than expected for Carnival Cruise Lines and its continental European brands. The company noted that booking volumes for the rest of the year are well ahead of 2013, but at lower prices.

For the three months ended Feb. 28, Carnival Corp. lost $15 million, or 2 cents per share. That compares with a profit of $37 million, or 5 cents per share, a year earlier.

The latest quarter included $17 million of unrealized losses on fuel derivatives.

Carnival said fuel prices fell 3.4 percent from a year ago. However, the $654 per metric ton in the first quarter was higher than the company's previous forecast for $643 per metric ton.

Stripping out fuel's impact, the Miami company broke even on a per-share basis.

Analysts, on average, expected a loss of 8 cents per share, according to a FactSet poll.

Revenue was nearly flat at $3.59 billion, but topped Wall Street's estimate of $3.56 billion.

Going forward, the cruise operator now expects 2014 adjusted earnings of $1.50 to $1.70 per share. Its prior outlook was for $1.40 to $1.80 per share. Analysts predicted earnings of $1.72 per share.

Carnival said its second-quarter results will range between an adjusted loss of 2 cents per share to an adjusted profit of 2 cents per share. Wall Street is calling for earnings of 7 cents per share.

Shares of Carnival fell $1.23, or 3.1 percent, to $38.77. The stock is up 19 percent over the past year.

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