Carnival Earnings Beat, Stocks Down

On Monday morning, American-British cruise company and the world’s largest cruise ship operator, Carnival (NYSE: CCL) announced their 3rd quarterly earnings beating analysts’ expectations. The company reported EPS of $1.92 on revenues of $5.1 billion, compared to consensus estimates of EPS of $1.89 on revenues of $5.06 billion.

“We delivered the strongest quarterly earnings in our company’s history affirming our ongoing efforts to expand consumer demand in excess of measured capacity increases and leverage our industry leading scale. Revenues during the peak summer season were bolstered by strong performances from both our North American and European brands and across all major deployments including the Caribbean, Alaska and Europe,” said Carnival Corporation & PLC President and Chief Executive Officer Arnold Donald.

Highlights of 3rd quarter

-Gross revenue yields increased 0.6 percent. Net revenue yields on a constant currency basis increased 2.7 percent for 3Q 2016, toward the top end of the June guidance range of up 2 to 3 percent.

-Gross cruise costs including fuel per ALBD decreased 0.2 percent. Net cruise costs excluding fuel per ALBD on a constant currency basis increased 5.5 percent, better than June guidance of up 6 to 7 percent, due to the timing of certain expenses.

-Changes in fuel prices (including realized fuel derivatives) and changes in currency exchange rates increased earnings by $0.02 per share.

Guidance for next quarter

Fourth quarter constant currency net revenue yields are expected to be up approximately 3 percent compared to the prior year. Fourth quarter constant currency net cruise costs excluding fuel per ALBD are expected to be higher by approximately 1 percent compared to the prior year. Based on the above factors, the company expects adjusted earnings per share for the fourth quarter 2016 to be in the range of $0.55 to $0.59 versus 2015 adjusted earnings per share of $0.50.

 

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