CHICAGO: Ongoing deep discounts on cruises and slower bookings by cash-strapped travelers combined to drag down Carnival Corp.'s fourth-quarter profit by 48 percent, the cruise line said Friday.

A weak forecast from the company for its first quarter combined with the news to cut into Carnival's shares Friday.

"Pricing for cruises still hasn't recovered as much as we would like," Howard Frank, Carnival's chief operating officer, told investors during a conference call Friday. "And perhaps that's a reflection of the currently uncertain economic picture for 2010."

As the economy tanked, cruise lines slashed ticket prices hoping to keep berths full aboard their massive ships. That strategy has cut average industry prices by around 30 percent — and far more in extreme cases, said Carolyn Spencer Brown, the editor in chief of CruiseCritic.com.

"Prices keep creeping up to some extent, but there are still some pretty extreme deals out there," she said.

Those deals are sharply cutting into revenue and profit. But travelers have so far been reticent, as carriers try to backtrack and raise prices as the recession wanes.

Carnival customers did begin to spend more in ship shops and on photography in the fourth quarter, the first time that type of spending rose all year. Executives said they were optimistic travelers will embrace higher ticket prices in 2010, adding that some of the most affluent travelers finally appear to be willing to spend again.

"In selective areas of our business we've seen more demand and have been able to move pricing higher," Frank said. "This also suggests that with the strengthening of the U.S. economy and the rise in equity markets, the higher-end customer is feeling better about taking their vacations."

The Miami-based company owns Carnival and Princess cruises, the Holland America Line and other cruise lines around the globe.

For the three months that ended Nov. 30, Carnival's quarterly profit dropped to $193 million, or 24 cents per share, from $371 million a year earlier. Its revenue slipped to $3.21 billion from $3.3 billion.

The 15 percent drop in fuel prices during the quarter helped Carnival beat Wall Street expectations. On average, analysts surveyed by Thomson Reuters forecast earnings per share of 20 cents on revenue of $3.2 billion.

The company expects to earn between 8 cents and 12 cents per share in the current quarter, while analysts forecast 17 cents. The shares fell $1.14, or 3.4 percent, to close at $32.22 Friday. The company forecast full-year 2010 earnings between $2.10 and $2.30 per share, and analysts forecast $2.28 per share.

"We are optimistic that the attractive pricing we have in the marketplace and pent-up demand for vacation travel will continue to stimulate strong booking volume," said Chairman and CEO Micky Arison.

Still, Wachovia analyst Timothy Conder said in a note to investors that the outlook was "slightly disappointing."

For the full year, Carnival earned $1.8 billion, or $2.24 per share. That's down almost 22 percent.

Full-year revenue was down about 10 percent to $13.16 billion.