Cruise giant reports record quarterly earnings

Arnold Donald: We are well on track to deliver nearly 25 percent earnings growth in 2016

SEPTEMBER 26, 2016 — Cruise giant Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) today announced what President and Chief Executive Officer Arnold Donald reported were “the strongest quarterly earnings in our company’s history.

Carnival reported U.S. GAAP net income of $1.4 billion, or $1.93 diluted EPS, for the third quarter of 2016 compared to U.S. GAAP net income for the third quarter of 2015 of $1.2 billion, or $1.56 diluted EPS. Third quarter 2016 adjusted net income of $1.4 billion, or $1.92 adjusted EPS, was higher than adjusted net income of $1.4 billion, or $1.75 adjusted EPS, for the third quarter of 2015. Adjusted net income excludes unrealized gains and losses on fuel derivatives and other net charges, totaling $7 million in gains for the third quarter 2016 and $149 million of losses for the third quarter 2015. Revenues for the third quarter of 2016 were $5.1 billion, $0.2 billion higher than the $4.9 billion in the prior year.

Mr. Donald said the earnings affirmed Carnival’s “ongoing efforts to expand consumer demand in excess of measured capacity increases and leverage our industry leading scale.”

Revenues during the peak summer season were bolstered by strong performances from both Carnival’s North American and its European brands and across all major deployments including the Caribbean, Alaska and Europe.

Outlook

Carnival says that currently cumulative advance bookings for the first half of next year are ahead of the prior year at considerably higher prices. Since June, booking volumes for the first half of next year are lower than the prior year, as there is less inventory remaining for sale, at significantly higher prices.

The company continues to expect full year 2016 net revenue yields to be up approximately 3.5 percent compared to the prior year, on a constant currency basis. The company continues to expect full year net cruise costs excluding fuel to be up approximately 1.5 percent compared to the prior year, on a constant currency basis.

The company has increased its full year 2016 adjusted earnings per share guidance to be in the range of $3.33 to $3.37, compared to the June guidance range of $3.25 to $3.35 and 2015 adjusted earnings per share of $2.70.

“We are well on track to deliver nearly 25 percent earnings growth in 2016,” said Mr. Donald. “With cash from operations expected to reach a record $5 billion this year, we continue to fund our growth and return cash to shareholders. During the third quarter we repurchased $700 million of Carnival Corporation shares bringing the cumulative total to $2.5 billion in share repurchases over the past year.”

“Looking forward, we are well positioned for continued earnings growth given the current strength of our booking and pricing trends in 2017,” he said.

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