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Carnival Corp. Reports $1.1 Billion Third Quarter Profit
Published on: September 23, 2009
Carnival Corporation & plc reported net income of $1.1 billion, or $1.33 earnings per share, on revenues of $4.1 billion for the third quarter ended Aug. 31. That compares to net income of $1.3 billion, or $1.65 earnings, on revenues of $4.8 billion in the same period last year. “Given the global economic environment earning more than $1 billion this quarter was quite an achievement and is a testament to the power of our global brands,” said Micky Arison, Carnival Corp. chairman and CEO. “Our net income for the quarter exceeded our previous guidance, as a result of better than expected pricing on close-in bookings worldwide during the seasonally strong summer period.”
Since June, booking volumes for the remainder of 2009 and the first half of 2010 are running 19 percent ahead of the prior year. Although occupancy levels are catching up with last year they are still slightly behind, with ticket prices for these bookings also at lower levels. “While the environment for travel remains challenging, we are encouraged by the strength we have had in booking volumes throughout the year,” Arison said. “Consumers are responding to the attractive pricing and product offerings our brands have in the marketplace. We have begun to experience an extension in the booking window as consumers realize the best value by booking early. For consumers, the value proposition has never been greater than it is now, so prospective vacationers looking for the best price should act quickly.”
During a conference call with analysts, Arison said he would like to place newbuild orders for Princess Cruises. “Pricing in euros has come back down to reality, but unfortunately, in the last 30 to 60 days, the dollar has weakened dramatically, which makes it tougher for U.S. brands,” he said. “We would like to build for Princess, but the situation right now is unlikely that a contract could be signed before the end of the year, which would make deliveries by 2012 less likely.”
In response to a question from an analyst about the attention paid to Royal Caribbean International’s Oasis of the Seas, Arison said, “the more success Oasis has, the better it is for us. More power to them.” He also noted that bookings for the new Carnival Dream are “terrific” and commanding a “very significant premium.” He said the same goes for the new Seabourn Odyssey.
Based primarily on the strength in the third quarter, the company now expects full-year net revenue yields, on a constant dollar basis, to decrease 10 percent, at the better end of its previous guidance range of down 10 to 12 percent. The company forecasts a 14 percent decline in net revenue yields on a current dollar basis for the full year 2009 compared to 2008 caused by unfavorable movements in currency exchange rates. The company continues to expect net cruise costs excluding fuel for the full year 2009 to be in line with the prior year on a constant dollar basis. Based on current spot prices for fuel, forecasted fuel costs for the full year have increased $40 million since the previous guidance, costing 5 cents per share. This has been partially offset by favorable movements in currency exchange rates worth 3 cents per share. The company now forecasts full-year 2009 earnings per share to be in the range of $2.16 to $2.20, compared to its previous guidance range of $2 to $2.10. Based on current fuel prices and currency exchange rates, the company expects earnings for the fourth quarter of 2009 to be in the range of 16 to 20 cents per share, down from 47 cents per share in 2008. For more information, visit www.carnivalcorp.com.
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