Carnival Corp. names new CEO, shows profit

The cruise liner Carnival Fantasy calls in Charleston, The cruise liner Carnival Fantasy calls in Charleston, S.C. (July 25, 2012) Photo Credit: AP

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Passengers remain hesitant to book cruises, despite deep discounts. But that didn't stop Carnival Corp. from eking out a $41 million second-quarter profit thanks to lower fuel costs and the timing of some administrative expenses.

The Miami-based company also announced Tuesday that Micky Arison, who has been CEO since 1979 and is the son of Carnival co-founder Ted Arison, is being replaced by Arnold W. Donald, who has served on the company's board for the past 12 years. Arison will continue to serve as chairman of the board.

The profit was nearly triple the $14 million the world's largest cruise company earned during the same period last year, a quarter in which it suffered from steep losses on fuel price bets known as derivatives. Revenue fell 1.7 percent to $3.48 billion.

Arison led the company through an expansion that included the acquisition of several brands, including Holland America, Costa Cruises, Cunard and Seabourn. In 2003, he oversaw a merger between Carnival Corp. and P&O Princess Cruises. Today, Carnival runs cruises under 10 brands.

However, Arison came under fire during Carnival's bad publicity earlier in the year when a string of its cruise ships suffered through mechanical problems and fires. The most dramatic of them was the Carnival Triumph where passengers were stranded at sea for five days as toilets backed up and air conditioners failed.

Donald founded and led Merisant, a company whose products include sweetener brands Equal and Canderel. He also held multiple senior management roles at Monsanto over the course of 20-plus years, including president of the company's consumer and nutrition sector and president of its agricultural sector.

The Triumph nightmare was followed up with problems on three other Carnival ships: the Elation, Dream and Legend -- all of which made big headlines.

In its earnings release, Carnival said advance bookings for the rest of 2013 are running behind last year's levels, even at lower prices.

Shares of Carnival Corp. closed up $1.67 to $34.89.

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