MIAMI – Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) announced non-GAAP net income of $159 million, or $0.20 diluted EPS,
for the first quarter of 2015 compared to non-GAAP net loss for the first
quarter of 2014 of $3 million, or $0.00 per share. For the first quarter of
2015, U.S. GAAP net income, which included unrealized losses on fuel
derivatives of $112 million, was $49 million, or $0.06 diluted earnings per
share. For the first quarter of 2014, U.S. GAAP net loss was $20 million, or
$0.03 diluted loss per share. Revenues
for the first quarter of 2015 were $3.5 billion compared to $3.6 billion in the
prior year.
Carnival Corporation & plc President and Chief Executive Officer Arnold
Donald noted “The year is off to a strong start achieving significantly higher
earnings than the prior year and our previous guidance. Our onboard revenue
initiatives drove particularly strong improvement in the first quarter with
onboard yields more than 8 percent higher than prior year (constant dollar).”
Donald also noted that the Carnival Cruise Line brand continued to outperform,
achieving significant revenue yield growth and remains on track for a strong
year. Additionally, Costa’s Asia
operations achieved double-digit revenue yield growth, affirming the pent-up
demand in the region and building confidence in the long-term potential for
growth.
Key metrics
for the first quarter 2015 compared to first quarter 2014 were as follows:
·
On a constant dollar basis, net revenue yields (net
revenue per available lower berth day or “ALBD”) increased 2.0 percent for 1Q
2015, which was better than the company’s December guidance of flat to up 1
percent. Gross revenue yields decreased 3.1 percent in current dollars due to
changes in currency exchange rates.
·
Net cruise costs excluding fuel per ALBD increased
2.4 percent in constant dollars primarily due to higher dry-dock costs and
advertising expenses. Costs were lower than December guidance, up 5.5 to 6.5
percent, substantially all due
to the timing of expenses between quarters. Gross cruise costs including fuel
per ALBD in current dollars declined 9.6 percent due to changes in fuel prices
and currency exchange rates.
·
Fuel prices declined 38 percent to $406 per
metric ton for 1Q 2015 from $654 per metric ton in 1Q 2014.
·
Fuel consumption per ALBD decreased 3.7 percent
in 1Q 2015 compared to the prior year.
·
Changes
in currency exchange rates reduced earnings by $0.06 per share (constant
currency).
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2015 Outlook
At this time, cumulative advance bookings for the remainder of 2015 are
ahead of the prior year at higher prices. Since January, booking volumes for
the remainder of the year are running in line with last year’s historically
high levels at higher prices.
Donald noted, “We are experiencing an ongoing improvement in underlying
fundamentals based on our successful initiatives to drive demand. Our efforts
to further elevate our guest experience are clearly resonating with consumers
and, notably, improving the frequency and retention of our loyal guests.”
Donald added, “We are also seeing results from our ongoing public relations
efforts and creative marketing campaign designed to attract new to cruise. Our
multifaceted campaign built around the Super Bowl garnered 5 billion media
impressions before the commercial aired and has exceeded 10 billion impressions
to date.” Donald also noted that the
recent delivery of Britannia, the
largest cruise ship built for Britain and christened by Her Majesty Queen
Elizabeth II, drew international acclaim and showcased cruising on a global
scale.
Based on current booking strength, the company expects full year
2015 net revenue yields to increase 3 to 4 percent on a constant currency
basis, which excludes translation and transactional currency impacts, compared
to the prior year. This is one full
point better than December guidance on a constant currency basis. On a constant
dollar basis, which does not exclude the unfavorable transactional impact of
currency, the company still expects yields to be approximately 2 percent higher
than the prior year. The company expects net cruise costs excluding fuel per
ALBD for full year 2015 to be up 2 to 3 percent compared to the prior year on a
constant dollar basis, which is better than December guidance of up 3 percent,
due primarily to the favorable transactional currency impact.
Since December, unfavorable changes in currency exchange rates (constant
currency) have reduced full year 2015 earnings expectations by $219 million, or
$0.28 per share. However, this impact has been significantly offset by
the improvement in the company’s operating performance, resulting in just
a $0.05 reduction to the midpoint of December guidance.
Taking the above factors into consideration, the company forecasts full
year 2015 non-GAAP diluted earnings per share to be in the range of $2.30 to $2.50,
compared to 2014 non-GAAP diluted earnings of $1.93 per share.
Looking forward, Donald stated, “Consistent with many global companies,
the strengthening of the U.S. dollar has hampered our full year earnings
expectations, masking the 3 to 4 percent (constant currency) yield increase our
collective brands are expecting to achieve. Our successful initiatives to drive
both ticket and onboard revenue yields have improved our financial performance
and we remain on track toward our goal of achieving double-digit return on
invested capital in the next three to four years.”
Second Quarter 2015 Outlook
Second quarter constant
dollar net revenue yields are expected to increase 2 to 3 percent compared to
the prior year. Net cruise costs excluding fuel per ALBD for the second quarter
are expected to be up 6.5 to 7.5 percent on a constant dollar basis compared to
the prior year. The increase is driven by higher annual dry-dock costs
primarily all of which will be incurred in the second quarter. Changes in fuel
prices net of fuel derivatives and currency exchange rates (constant currency)
are expected to benefit second quarter earnings by $74 million compared to the
prior year, or $0.09 per share.
Based on the above factors, the company expects non-GAAP diluted
earnings for the second quarter 2015 to be in the range of $0.11 to $0.15 per
share versus 2014 non-GAAP earnings of $0.09 per share.
Selected Key
Forecast Metrics
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Full Year 2015
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Second Quarter 2015
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Year
over year change:
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Current
Dollars
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Constant Dollars
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Current
Dollars
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Constant Dollars
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Net revenue yields
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(3.5)
to (4.5)%
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1.5
to 2.5%
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(4.0)
to (5.0)%
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2.0 to 3.0%
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Net
cruise costs excl. fuel / ALBD
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(3.0)
to (4.0)%
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2.0
to 3.0%
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(0.5)
to 0.5%
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6.5
to 7.5 %
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Full
Year 2015
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Second Quarter 2015
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Fuel
price per metric ton
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$ 406
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$
402
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Fuel
consumption (metric tons in thousands)
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3,190
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810
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Currency: Euro
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$1.10 to €1
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$1.08 to €1
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Sterling
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$1.50 to £1
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$1.49 to £1
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Australian dollar
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$0.78 to A$1
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$0.77 to A$1
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Canadian dollar
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$0.80 to C$1
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$0.79 to C$1
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Conference Call
The company has scheduled a conference call with analysts at
10:00 a.m. EDT (2:00 p.m. GMT) today to discuss its 2015 first quarter results.
This call can be listened to live, and additional information can be obtained,
via Carnival Corporation & plc’s Web site at www.carnivalcorp.com and www.carnivalplc.com.
Carnival Corporation & plc is the largest cruise company
in the world, with a portfolio of cruise brands in North
America, Europe, Australia
and Asia, comprised of Carnival Cruise Line,
Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises,
Cunard, P&O Cruises (Australia) and P&O
Cruises (UK).
Together, these brands operate 101 ships totaling 216,000
lower berths with nine new ships scheduled to be delivered between 2015 and
2018. Carnival Corporation & plc also operates Holland America Princess
Alaska Tours, the leading tour companies in Alaska
and the Canadian Yukon. Traded on both the New York
and London Stock Exchanges, Carnival Corporation & plc is the only group in
the world to be included in both the S&P 500 and the FTSE 100
indices. Additional information can be found on www.carnival.com, www.hollandamerica.com,
www.princess.com, www.seabourn.com, www.aida.de, www.costacruise.com, www.cunard.com, www.pocruises.com.au,
and www.pocruises.com.
