MIAMI - Carnival Corporation &
plc (NYSE/LSE: CCL; NYSE: CUK) announced U.S. GAAP net income of $391 million,
or $0.54 diluted EPS, for the first quarter of 2018, higher than U.S. GAAP net
income for the first quarter of 2017 of $352 million, or $0.48 diluted EPS.
First quarter 2018 adjusted net income of $375 million, or $0.52 adjusted EPS,
was higher than adjusted net income of $279 million, or $0.38 adjusted EPS, for
the first quarter of 2017. Adjusted net income excludes unrealized gains and
losses on fuel derivatives and other net charges, totaling $16 million in net
gains for the first quarter of 2018 and $73 million in net gains for the first
quarter of 2017. Revenues for the first quarter of 2018 of $4.2 billion were
higher than the $3.8 billion in the prior year.
Carnival Corporation & plc President and Chief
Executive Officer Arnold Donald stated, “We are off to a strong start to the
year achieving another quarter of record earnings on record revenues and
exceeding the high end of guidance. This strong operational execution affirms
our efforts to create demand in excess of measured capacity growth and exceed
guest expectations once onboard. Our guest experience efforts, coupled with our
ongoing marketing and public relations programs are clearly accelerating cruise
demand across the board to drive cruise ticket prices higher.”
Key information for the first quarter 2018 compared to
the prior year:
•
Gross revenue yields (revenue
per available lower berth day or “ALBD”) increased 9.2 percent.In constant
currency, net revenue yields increased 3.9 percent for 1Q 2018, better than
December guidance of up 1.5 to 2.5 percent.
•
Gross cruise costs including
fuel per ALBD increased 9.0 percent. In constant currency, net cruise costs
excluding fuel per ALBD increased 1.0 percent, better than December guidance of
up 2.0 to 3.0 percent, principally due to the timing of expenses between
quarters.
•
Changes in fuel prices
(including realized fuel derivatives) decreased earnings by $0.04 per share,
offset by an increase in earnings due to changes in currency exchange rates of
$0.04 per share.
Highlights from the first quarter
include the signing of agreements with German shipbuilder Meyer Werft GmbH to
build two new cruise ships that will be powered by liquefied natural gas
(“LNG”). The first is designated for P&O Cruises (UK) to be delivered in
2022 with the second for AIDA Cruises in 2023. Also during the quarter, we
continued to drive demand and cruise awareness with successful new marketing
efforts: Carnival Cruise Line appointed Shaquille O’Neal as their new “CFO,”
Chief Fun Officer; Cunard hosted the world premiere of “The Greatest Showman,”
broadcasting the red carpet event live on Flagship Queen Mary 2; Costa Cruises launched a new international ad
campaign featuring Shakira that will be aired in Southern Europe and P&O
Cruises launched a new marketing campaign featuring UK celebrity Rob Brydon.
Additionally, we launched the new prime time series La Gran Sorpresa on
Univision and extended our original TV programming to Telemundo, which will now
be featuring our popular Ocean Originals TV program, “The Voyager with Josh
Garcia.”
At this time,
cumulative advanced bookings for the remainder of 2018 are in line with the
prior year at higher prices. Since January, booking volumes for all future
periods have been running ahead of prior year at higher prices.
Donald
added, “The booking strength achieved during this year’s wave season, outpacing
even last year’s record levels, demonstrates sustained strong demand for our
world’s leading cruise brands and delivers further confidence in our raised
earnings guidance. We remain on track to achieve double-digit return on
invested capital while continuing to return cash to shareholders through
ongoing share repurchases and dividend growth.” The company invested more than
$250 million in share repurchases since the beginning of the quarter, bringing
the cumulative total of repurchases to date to over $3.4 billion since late
2015.
Based on
current booking trends, the company expects full year 2018 net revenue yields
in constant currency to be up approximately 2.5 percent compared to the prior
year, in line with December guidance. The company expects full year net cruise
costs excluding fuel per ALBD in constant currency compared to the prior year
to be up approximately 1.0 percent, also
in line with December guidance. Changes in fuel prices (including
realized fuel derivatives) and currency exchange rates are expected to increase
earnings by 0.10 per share compared to December guidance.
Taking the above factors into consideration, the company expects
full year 2018 adjusted earnings per share to be in the range of $4.20 to $4.40
compared to December guidance of $4.00 to $4.30 and 2017 adjusted earnings per
share of $3.82.
Second quarter
constant currency net revenue yields are expected to be up approximately 2.5 to
3.5 percent compared to the prior year. Net cruise costs excluding fuel per
ALBD in constant currency for the second quarter of 2018 are expected to
increase by approximately 4.0 to 5.0 percent compared to the prior year. Based
on the above factors, the company expects adjusted earnings per share for the
second quarter 2018 to be in the range of $0.56 to $0.60 versus 2017 adjusted
earnings per share of $0.52.
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Full Year 2018
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Second Quarter 2018
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Year over year change:
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Current
Dollars
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Constant
Currency
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Current
Dollars
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Constant
Currency
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Net revenue yields
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Approx 6.0%
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Approx 2.5%
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7.0 to 8.0%
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2.5 to 3.5%
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Net cruise costs excl. fuel / ALBD
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Approx 4.0%
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Approx 1.0%
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8.5 to 9.5%
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4.0 to 5.0%
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Full Year 2018
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Second Quarter 2018
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Fuel cost per metric ton consumed
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$443
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$436
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Fuel consumption (metric tons in
thousands)
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3,315
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830
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Currencies (USD to 1)
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AUD
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$0.77
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$0.77
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CAD
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$0.77
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$0.76
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EUR
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$1.22
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$1.23
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GBP
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$1.40
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$1.40
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RMB
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$0.16
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$0.16
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Three Months Ended
February 28, |
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2018
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2017
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Net income (in millions)
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$
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391
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$
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352
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Adjusted net income (in millions)
(a)
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$
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375
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$
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279
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Earnings per share-diluted
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$
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0.54
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$
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0.48
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Adjusted earnings per share-diluted (a)
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$
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0.52
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$
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0.38
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(a) See the net income to adjusted net income and EPS to
adjusted EPS reconciliations in the Non-GAAP Financial Measures included
herein.
