Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced non-GAAP net income of $2 million, or $0.00 diluted EPS for the first quarter of 2014 compared to non-GAAP net income for the first quarter of 2013 of $67 million, or $0.08 diluted EPS. For the first quarter of 2014, U.S. GAAP net loss, which included net unrealized losses on fuel derivatives of $17 million, was $15 million, or $0.02 diluted loss per share. For the first quarter of 2013, U.S. GAAP net income was $37 million, or $0.05 diluted earnings per share. Revenues for the first quarter of 2014 were $3.6 billion in line with the prior year.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted that first quarter non-GAAP earnings were better than anticipated in the company’s December guidance due to better than expected ticket prices for Carnival Cruise Lines and our continental European brands, as well as the timing of certain expenses.

Donald noted, “We see progress with our continental European brands and continue to be pleased with Carnival Cruise Lines’ pace of improvement. Exciting product innovations and strategic marketing initiatives at Carnival Cruise Lines have driven strong close-in demand resulting in sequential improvement in year-over-year quarterly ticket prices for the brand.” During the quarter, Carnival Cruise Lines announced an exclusive partnership with Dr. Seuss Enterprises to bring the beloved children’s brand and favorite characters to its fleet and the Carnival LIVE Concert Series, which brings the best in live music to the seas with a diverse roster of popular music artists including Jennifer Hudson, Lady Antebellum and Jewel. These brand building initiatives complement the continued roll-out of its Fun Ship 2.0 product enhancement program, as well as ongoing travel agent outreach and the unprecedented Great Vacation Guarantee. In addition, Carnival Cruise Lines was the national cruise line advertiser of the Sochi 2014 Olympic Winter Games, with its creative “Bobslide” campaign which targeted the family segment and furthered the brand’s new marketing campaign launched last fall.

Key metrics for the first quarter 2014 compared to first quarter 2013 and December guidance were as follows:

  • On a constant dollar basis, net revenue yields (net revenue per available lower berth day or “ALBD”) decreased 2.1 percent for 1Q 2014. Gross revenue yields decreased 1.9 percent in current dollars.

  • Net cruise costs excluding fuel per ALBD increased 3.3 percent in constant dollars driven by higher advertising spend. Costs were better than December guidance, up 4.5 to 5.5 percent primarily due to the timing of certain expenses. Gross cruise costs including fuel per ALBD in current dollars were flat.

  • Fuel prices declined 3.4 percent to $654 per metric ton for 1Q 2014 from $677 per metric ton in 1Q 2013 but were higher than December guidance of $643 per metric ton.

  • Fuel consumption per ALBD decreased 4.8 percent in 1Q 2014 compared to the prior year.

2014 Outlook

Since January, booking volumes for the remainder of the year are running well ahead of last year at lower prices. At this time, cumulative advance bookings for the remainder of 2014 are ahead of the prior year at prices below prior year levels.

Donald noted, “We have experienced a solid wave season, with booking volumes up almost 20 percent globally surpassing last year’s cumulative advance booking levels, albeit at lower prices. Many guests are booking further in advance, which increases visibility and builds confidence that yield comparisons will turn positive in the second half of 2014. Increased interest across our brands is an encouraging indication that our message is resonating as consumers recognize the strong value proposition and exceptional vacation experiences we provide.”

The company continues to expect full year 2014 net revenue yields, on a constant dollar basis, to be down slightly compared to the prior year (in line with the prior year on a current dollar basis).  The company also continues to expect net cruise costs excluding fuel per ALBD for full year 2014 to be slightly higher than the prior year on a constant dollar basis.

Taking the above factors into consideration, the company forecasts full year 2014 non-GAAP diluted earnings per share to be in the range of $1.50 to $1.70, compared to 2013 non-GAAP diluted earnings of $1.58 per share.

Looking forward, Donald stated, “We are on the path toward improved financial performance. We are working hard to maintain the momentum with additional product initiatives, continuous improvement in our already high guest satisfaction levels and greater utilization of our global scale.”

Second Quarter 2014 Outlook

Second quarter constant dollar net revenue yields are expected to decrease 3 to 4 percent compared to the prior year. Net cruise costs excluding fuel per ALBD for the second quarter are expected to be up 2.5 to 3.5 percent on a constant dollar basis compared to the prior year due primarily to higher selling and administrative costs.

Based on the above factors, the company expects non-GAAP diluted earnings (loss) for the second quarter 2014 to be in the range of $(0.02) to $0.02 per share versus 2013 non-GAAP earnings of $0.07 per share.

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 2014 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 Lines, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK).

Together, these brands operate 101 ships totaling 208,000 lower berths with eight new ships scheduled to be delivered between 2014 and 2016.  Carnival Corporation & plc also operates Holland America Princess Alaska Tours, the leading tour company 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.

Cautionary Note Concerning Factors That May Affect Future Results

Carnival Corporation and Carnival plc and their respective subsidiaries are referred to collectively in this release as “Carnival Corporation & plc,” “our,” “us” and “we.” Some of the statements, estimates or projections contained in this release are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, outlooks, plans, goals and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts are statements that could be deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like “will,” “may,” “could,” “should,” “would,” “believe,” “depends,” “expect,” “goal,” “anticipate,” “forecast,” “project,” “future,” “intend,” “plan,” “estimate,” “target,” “indicate” and similar expressions of future intent or the negative of such terms.

Forward-looking statements include those statements that may impact, among other things, the forecasting of our non-GAAP earnings per share; net revenue yields; booking levels; pricing; occupancy; operating, financing and tax costs, including fuel expenses; net cruise costs per available lower berth day; estimates of ship depreciable lives and residual values; liquidity; goodwill and trademark fair values and outlook.  Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied in this release. These factors include, but are not limited to, the following:

  • general economic and business conditions;

  • increases in fuel prices;

  • incidents, the spread of contagious diseases and threats thereof, adverse weather conditions or other natural disasters and other incidents affecting the health, safety, security and satisfaction of guests and crew;

  • the international political climate, armed conflicts, terrorist and pirate attacks, vessel seizures, and threats thereof, and other world events affecting the safety and security of travel;

  • negative publicity concerning the cruise industry in general or us in particular, including any adverse environmental impacts of cruising;

  • litigation, enforcement actions, fines or penalties;

  • economic, market and political factors that are beyond our control, which could increase our operating, financing and other costs;

  • changes in and compliance with laws and regulations relating to the protection of persons with disabilities, employment, environment, health, safety, security, tax and other regulations under which we operate;

  • our inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments on terms that are favorable or consistent with our expectations;

  • increases to our repairs and maintenance expenses and refurbishment costs as our fleet ages;

  • lack of continuing availability of attractive, convenient and safe port destinations on terms that are favorable or consistent with our expectations;

  • continuing financial viability of our travel agent distribution system, air service providers and other key vendors in our supply chain and reductions in the availability of, and increases in the prices for, the services and products provided by these vendors;

  • disruptions and other damages to our information technology and other networks and operations, and breaches in data security;

  • failure to keep pace with developments in technology;

  • competition from and overcapacity in the cruise ship and land-based vacation industry;

  • loss of key personnel or our ability to recruit or retain qualified personnel;

  • union disputes and other employee relation issues;

  • disruptions in the global financial markets or other events may negatively affect the ability of our counterparties and others to perform their obligations to us;

  • the continued strength of our cruise brands and our ability to implement our brand strategies;

  • our international operations are subject to additional risks not generally applicable to our U.S. operations;

  • geographic regions in which we try to expand our business may be slow to develop and ultimately not develop how we expect;

  • our decisions to self-insure against various risks or our inability to obtain insurance for certain risks at reasonable rates;

  • fluctuations in foreign currency exchange rates;

  • whether our future operating cash flow will be sufficient to fund future obligations and whether we will be able to obtain financing, if necessary, in sufficient amounts and on terms that are favorable or consistent with our expectations;

  • risks associated with the dual listed company arrangement and

  • uncertainties of a foreign legal system as Carnival Corporation and Carnival plc are not U.S. corporations.

Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this release, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.

Information source: Carnival Cruise Lines

Related Post

Comments closed.