Carnival’s Arison steps down as CEO after cruise incidents

LOS ANGELES — Carnival Corp., the cruise operator beset by mishaps at sea this year, said Tuesday that Micky Arison will step down as chief executive officer after 34 years while remaining chairman. The shares rose.

The 63-year-old Arison, Carnival’s largest shareholder, will hand the job on July 3 to Arnold W. Donald, a director for 12 years, Miami-based Carnival said in a statement. Arison, son of founder Ted Arison, said he suggested splitting the chairman and CEO roles to align the world’s largest cruise operator with best practices. The company didn’t conduct an outside search, he said on a conference call.

Arison steps aside after crises that generated cable-news coverage and forced price cuts to fill Carnival berths. An engine-room fire on the Triumph ship in February left 3,100 passengers stranded at sea for days with limited food and toilet service. At least two other Carnival vessels were involved in incidents, leading to canceled voyages and customer refunds.

“I view my role as doing whatever Arnold needs me to do,” Arison said on a conference call with investors. “It’s really going to be a collaborative thing between me and Arnold to decide what are the best uses of my time.”

Donald, 58, founded and led Merisant, a company whose products include tabletop sweetener brands Equal and Canderel. He held senior management roles at Monsanto Co. over more than 20 years, including president of the consumer and nutrition unit and president of its agricultural division.

The change is likely to be well-received by investors, said Steven Wieczynski, an analyst with Stifel Nicolaus &Co., in a report to clients, citing the benefits of fresh perspectives on the company’s practices and processes. He said the change may also pull Arison, who is also owner of the Miami Heat basketball team, out of the media’s spotlight.

“Investors we have spoken to in recent months, particularly in light of the company’s recent mishaps, expressed it could work to the company’s advantage to bring about change in the executive suite,” said Wieczynski, who rates the stock a buy.

Second-quarter profit topped estimates that had been lowered by analysts in the wake of the Triumph incident. Bookings for the remainder of the year are running behind 2012, at lower prices, the company said.

Howard Frank, Carnival’s vice chairman, said on the call that the company’s troubles this year would hurt profit by 50 cents a share, compared what the company expected before any of the incidents, citing lower revenue and increased repair and marketing costs.

The Carnival brand continues to see lower bookings, Frank said, and it may be two to three years before that line sees its business return to previous levels.

For the second quarter ended May 31, Carnival reported net income almost tripled to $41 million, or 5 cents a share, from $14 million, or 2 cents, a year earlier, when the company was still dealing with the fallout from the shipwreck of its Costa Concordia off the coast of Italy.

Excluding unrealized losses on fuel derivatives, profit fell to 9 cents a share from 20 cents, while exceeding the 7- cent average of estimates compiled by Bloomberg.

Sales fell 1.7 percent to $3.48 billion in the quarter ended May 31. Analysts had projected revenue of $3.56 billion.

Carnival last month lowered its profit forecast for the second half of 2013, saying revenue per customer fell after the price cuts. The company reiterated its full-year profit will total $1.45 to $1.65 a share.

The company has made other personnel changes including naming a new head of corporate communications last week.

“There isn’t much encouraging news in today’s earnings release, other than, perhaps, new blood at the top,” Nomura Securities analyst Harry Curtis said in a research note today.

More in Herald Business Journal

Disney buying large part of 21st Century Fox in $52.4B deal

Before the buyout, 21st Century Fox will spin off the Fox network, stations and cable channels.

For modern women, 98-year-old rejection letters still sting

In a stark new video, female Boeing engineers break the silence about past inopportunity.

Commentary: GM, Boeing fight a war of words over Mars

Boeing is strongly signaling how crucial deep-space exploration is to its future.

Angel of the Winds pays $3.4M for Everett arena naming rights

The casino replaces Xfinity as the lead sponsor for the publicly owned downtown Everett events center.

Delta orders 100 Airbus A321neo jets valued at $12.7 billion

Boeing had hoped to land the deal, offering comparable 737s.

Tulalips break ground on new Quil Ceda Creek Casino Hotel

A 150-room hotel was added to what is now a $140 million complex expected to open in spring 2019.

What can be learned from the optimism of Churchill, Elon Musk

A new movie, “The Dark Years,” depicts Winston Churchill during the perilous… Continue reading

Providence Hospital in Everett at sunset Monday night. Officials Providence St. Joseph Health Ascension Health reportedly are discussing a merger that would create a chain of hospitals, including Providence Regional Medical Center Everett, plus clinics and medical care centers in 26 states spanning both coasts. (Kevin Clark / The Daily Herald)
Merger would make Providence part of health care behemoth

Providence St. Joseph Health and Ascension Health are said to be talking. Swedish would also be affected.

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Most Read