Florida, United States – Higher-than-expected fuel prices pushed Carnival Corp.’s first-quarter profit down 13 per cent, but the cruise operator managed to meet Wall Street’s expectations thanks to cutting other costs.

Carnival, whose brands include the Holland America Line, Princess Cruises, Carnival Cruise Lines and Costa Cruises, reduced its full-year earnings guidance to a range below analysts’ expectations on Tuesday.

Its stock dropped US$1.02, or 2.5 per cent, to US$39.99 in morning trading.

For the period ended Feb 28, Carnival reported net income of US$152 million, or 19 cents per share, down from US$175 million, or 22 cents per share, a year ago.

Wall Street was already anticipating the results, as the Miami company had provided its quarterly expectations earlier this month.

Carnival said its performance benefited from lower than-expected costs that helped offset fuel prices that rose nine per cent. The company also said the prior-year period included a benefit of 10 cents per share in unusual items.

Revenue climbed eight per cent to US$3.42 billion from US$3.18 billion on higher ticket prices and passengers spending more on board its ships.

The performance beat Wall Street’s average revenue estimate of US$3.28 billion .

The economic recovery has allowed cruise operators to raise their ticket prices without much resistance. People are again starting to feel confident enough to spend more on travel at sea, with the recession’s harshest effects beginning to fade for many.

First-quarter net revenue yields, which measures the amount a cruise company makes from its passengers after removing expenses, increased two per cent on a constant dollar basis due to higher prices for Carnival’s European brands.

Carnival now predicts full-year earnings of US$2.55 to US$2.65 per share. It previously anticipated earnings of US$2.90 to US$3.10 per share.

Analysts expect US$2.76 per share for the year.

Carnival said fuel prices have climbed “significantly” since it provided its outlook in December.

For the second quarter, the cruise operator forecasts earnings of 20 cents to 24 cents per share. Wall Street is looking for 33 cents per share.

While fuel prices are dampening Carnival’s outlooks, the company is upbeat about the peak summer season.

CEO Micky Arison said in a statement that ticket prices remain strong.

“The convenience and affordability of a cruise vacation continues to gain recognition as consumers discover the unrivaled experience cruising offers,” he said.

Carnival also indicated that booking volumes and prices for the three remaining quarters are running higher than a year ago.

The company operates 98 ships and has 10 new ships set to be delivered between March 2011 and May 2014.