MIAMI – Carnival
Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced non-GAAP net income of $193
million, or $0.25 diluted EPS for the second quarter of 2015 compared to
non-GAAP net income for the second quarter of 2014 of $73 million,
or $0.09 diluted EPS.
For the second quarter of 2015, U.S. GAAP net income, which included unrealized gains
on fuel derivatives of $34 million and $7 million of restructuring expenses, was $222 million, or $0.29 diluted EPS.
For the second quarter of 2014, U.S. GAAP net income was $98 million, or $0.13
diluted EPS. Revenues for the second quarter of 2015 were $3.6 billion, in line with the
prior year.
Carnival Corporation & plc President and CEO Arnold
Donald noted “We more than doubled our second quarter earnings versus the
comparable period a year ago and significantly exceeded our quarterly earnings
guidance. Our initiatives to create demand and leverage our scale benefited
both cruise ticket prices and onboard revenues contributing to 5% revenue yield
improvement (constant currency) this quarter. While all of our North American
brands enjoyed strong revenue yield improvement, our Carnival Cruise Line brand
performed particularly well again this quarter. We thank our teams around the
globe for their consistent delivery of exceptional guest experiences as well as
our travel agent partners for their strong support, both of which are critical
to our success.”
Significant milestones during the second quarter
included the launch of “fathom”, the tenth brand in the Carnival Corporation
family. Beginning in April 2016, “fathom” will introduce a new cruise category offering travelers authentic and
meaningful experiences to targeted destinations, beginning with the Dominican
Republic, to work alongside locals for transformational community impact.
Additionally, Costa began year-round service from Shanghai
on Costa Serena in April and
announced the deployment of Costa Fortuna
to China in 2016 bringing the total to four Costa ships dedicated to Chinese
guests. Princess Cruises also announced that it will expand its presence in
Asia with a new ship scheduled to enter service in mid-2017 to be based in
China year-round and custom-designed specifically for Chinese guests. Already
the industry leader in passenger cruise days home ported in China, these developments
will further the company’s leading presence in this rapidly expanding market
and attract new cruisers to the company’s brands.
Also, earlier this month Carnival Corporation finalized
a contract with Meyer Werft shipyard to build four next-generation ships that
will feature the largest guest capacity in the world as well as the first
cruise ships to be powered at sea by Liquefied Natural Gas, which is the
world’s cleanest-burning fossil fuel.
“These milestones further demonstrate our ongoing
focus on effective strategic actions, technological development and innovation,
laying the foundation for future growth and continued global expansion,” said
Donald.
Key metrics for the second quarter 2015 compared to the
prior year were as follows:
·
On a constant dollar basis, net
revenue yields (net revenue per available lower berth day or “ALBD”) increased 4.1 percent
for 2Q 2015,
which was better than the company’s guidance of up 2 to 3 percent. Gross revenue yields decreased 3.5 percent in current
dollars due to changes
in currency exchange rates.
·
Net cruise costs excluding
fuel per ALBD increased 6.1 percent in constant dollars, primarily due to an increase in dry-dock days. Costs were better than March guidance, up 6.5
to 7.5 percent due to the timing of expenses between quarters. Gross cruise costs including fuel per ALBD in current dollars decreased 8.0 percent due to changes in fuel prices and
currency exchange rates.
·
Fuel prices declined 37 percent
to $411 per metric ton for 2Q 2015 from $657 per metric ton in
2Q 2014 but
were higher than March guidance of $402 per metric ton.
·
Changes
in currency exchange rates reduced earnings by $0.10 per share (constant
currency).
2015 Outlook
During the last thirteen weeks, fleetwide booking
volumes for the next three quarters were running well ahead of last year at slightly
lower prices due to transactional currency impacts. At this time, cumulative
advance bookings for the next three quarters are well ahead of the prior year
at slightly lower prices again due to transactional currency impacts.
Donald noted “Current strength in booking volumes
clearly demonstrates strong consumer demand for our brands, leaving less
inventory remaining for sale and building confidence in achieving significant revenue
yield improvement this year. We are stepping up our marketing investment for
the remainder of the year to further solidify our base of business for 2016 and
drive continued yield improvement as we progress on our path toward double digit
return on invested capital.”
The company continues
to expect full year 2015 net revenue yields on a constant currency basis to be
up 3 to 4 percent, which excludes translational and transactional currency
impacts, compared to the prior year (up 2 to 3 percent on a constant dollar
basis compared to the prior year). The company now expects full year 2015 net
cruise costs excluding fuel per ALBD to be up approximately 3 percent compared
to the prior year on a constant dollar basis, which is slightly higher than had
been anticipated in the March guidance mainly due to increased investment in
advertising.
Taking the above factors into consideration, the company
has increased its full year 2015 non-GAAP diluted earnings per share guidance to
be in the range of $2.35 to $2.50, compared to 2014 non-GAAP diluted earnings
of $1.93 per share.
Third Quarter 2015 Outlook
Third quarter
constant currency net revenue yields are expected to be up 3 to 4 percent compared
to the prior year (up 2 to 3 percent in constant dollars). Net cruise costs
excluding fuel per ALBD for the third quarter are expected to be 2 to 3 percent
higher on a constant dollar basis compared to the prior year. Changes in fuel
prices net of derivatives, and currency is expected to reduce third quarter
earnings by $0.06 per share.
Based on the above factors, the company
expects non-GAAP diluted earnings for the third quarter 2015 to be in the range
of $1.56 to $1.60 per share versus 2014 non-GAAP earnings of $1.58 per share.
Selected Key Forecast Metrics
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Full
Year 2015
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Third 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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(2.0)
to (3.0)%
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2.0 to 3.0%
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(3.0) to (4.0)%
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2.0
to 3.0%
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Net cruise costs excl. fuel / ALBD
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(1.5) to (2.5)%
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2.5 to 3.5%
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(2.5) to
(3.5)%
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2.0 to 3.0%
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Full Year 2015
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Third Quarter 2015
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Fuel price per metric ton
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444
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492
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Fuel consumption (metric tons in thousands)
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3,190
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790
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Currency: Euro
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$1.13 to €1
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$1.13 to €1
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Sterling
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$1.53 to £1
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$1.54 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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$0.81
to C$1
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$0.80 to C$1
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Conference Call
The company has scheduled a conference call
with analysts at 10:00 a.m. EDT (3:00 p.m. BST) today to discuss its 2015
second 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 10 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), P&O Cruises (UK) and fathom.
Together, these brands will operate 100
ships in 2015 totaling 219,000 lower berths with eight new ships scheduled to
be delivered between 2016 and 2018, along with four additional new ships
on order between 2019 through 2022. 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, www.pocruises.com and www.fathom.org.
