By Chris Peters
Tue Jun 25, 2013 1:42pm EDT
June 25 - Cruise operator Carnival Corp's (CCL.N) chief executive of three decades, Micky Arison, will relinquish the helm next month to be replaced by a long-time board member whose last CEO job was running an artificial sweetener maker more than a decade ago.
Arnold Donald will take over running the world's largest cruise company on July 3 in the wake of a series of mishaps involving Carnival ships -- including the sinking of the Costa Concordia off Italy last year -- that have damaged its reputation and hurt bookings.
Billionaire Arison, who owns about 30 percent of the company his father Ted co-founded in 1972, will remain chairman.
Shares of Carnival, which also reported stronger-than-expected earnings on Tuesday, rose as much as 5 percent on Tuesday. However, the company said bookings and prices for the rest of the year were lower than last year.
Carnival's shares had fallen about 15 percent since February when another ship, Carnival Triumph, was left adrift in the Gulf of Mexico for several days following an engine fire.
"It's good to separate the CEO and chairman roles. It helps with checks and balances," Morningstar analyst Jamie Katz said.
Arison, who just celebrated a second NBA title as owner of the Miami Heat, was criticized earlier this year for attending a game while passengers were drifting on the Triumph.
"I'm going to be looking to Arnold to run the day-to-day corporate operations and I may even take a couple of golf lessons," Arison, 63, said on an analyst call when asked how involved he would remain in the company's operations.
Still, the new CEO remains a largely unknown quantity.
"On one hand Donald is a good choice in terms of someone that has familiarity with the company, on the other hand he doesn't necessarily have the direct operational experience," ITG analyst Matthew Jacob said.
Donald, who has been on the Carnival board for 12 years, was senior vice-president at Monsanto (MON.N) in the late 90s and served as chief executive of the seed giant's Equal sweetener business, when it was spun off as Merisant Co in 2000.
Since then, he has primarily served as a director of several companies, including Bank of America Corp (BAC.N).
RECOVERY BEGINS?
Carnival, which owns the Carnival, Holland America, P&O, and Cunard cruise lines, among others, also reported a quarterly profit that beat analyst estimates, helped by lower fuel prices.
Fuel prices decreased 9.7 percent to an average $683 per metric ton from a year earlier.
"Our advisers are saying that the recovery will be gradual and it will take two to three years for the Carnival brand to fully recover, but the good news is that it appears that the recovery has started," Chief Operating Officer Howard Frank said on the call.
The company, which has cut its full-year profit outlook twice this year, reaffirmed its forecast of earnings of $1.45 to $1.65 per share. Analysts on average were expecting $1.60 per share, according to Thomson Reuters I/B/E/S.
Carnival's net income rose to $41 million, or 5 cents per share, in the second quarter from $14 million, or 2 cents per share, a year earlier. Excluding items, the company earned 9 cents per share. Revenue fell 2 percent to $3.48 billion.
Analysts had forecast quarterly earnings of 6 cents per share on revenue of $3.55 billion.
Carnival's shares were up 4.7 percent at $34.74 on the New York Stock Exchange at midday. Shares of its main rival, Royal Caribbean Cruises Ltd (RCL.N), were up 4 percent at $33.08.
(Reporting by Chris Peters in Bangalore and Phil Wahba in New York; Editing by Roshni Menon and Ted Kerr)
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