GAAP
earnings per share down 5%, adjusted earnings per share up nearly 20%
MIAMI - Carnival Corporation
&plc (NYSE/LSE: CCL; NYSE: CUK) announced U.S. GAAP net income of $1.3
billion, or $1.83 diluted EPS, for the third quarter of 2017 compared to U.S.
GAAP net income for the third quarter of 2016 of $1.4 billion, or $1.93 diluted
EPS. Third quarter 2017 adjusted net income of $1.7 billion, or $2.29 adjusted
EPS, was higher than adjusted net income of $1.4 billion, or $1.92 adjusted
EPS, for the third quarter of 2016. Adjusted net income excludes unrealized
gains on fuel derivatives of $65 million and impairments and other net charges
of $395 million for the third quarter 2017 and net gains of $7 million for the
third quarter 2016. Revenues for the third quarter of 2017 of $5.5 billion were
higher than the $5.1 billion in the prior year.
Carnival Corporation &plc President and Chief
Executive Officer Arnold Donald stated, “We delivered another consecutive
quarter of strong operational improvement and another third quarter adjusted
earnings record. Our ongoing efforts to create demand well in excess of
measured supply growth helped to drive five percent higher cruise ticket
pricing. We have many innovative efforts to accelerate demand in 2018 and
beyond including our recently announced digital streaming channel, OceanView,
and our mobile gaming portfolio, PlayOcean, both launching this week.” The
company will launch OceanView and PlayOcean at a public relations event in New
York City's Time Square on September 28th between 11 a.m. and 1 p.m.
Key information for the third quarter 2017 compared to
the prior year:
•
Gross revenue yields (revenue
per available lower berth day or “ALBD”) increased 5.5 percent.In constant
currency, net revenue yields increased 5.1 percent for 3Q 2017, better than
June guidance of up approximately 4.0 percent.
•
Gross cruise costs including
fuel per ALBD increased 12.4 percent (including ship impairment charges). In
constant currency, net cruise costs excluding fuel per ALBD increased 0.2
percent, in line with June guidance of approximately flat.
•
Changes in fuel prices
(including realized fuel derivatives) and currency exchange rates decreased
earnings by $0.03 per share.
•
Noncash impairment charges for
ships, trademark and goodwill of $392 million driven by the company's decision
to strategically realign its business in Australia.
Highlights from the third
quarter include the official naming ceremonies for AIDA Cruises’ AIDAperla, which was christened in Palma
de Mallorca with German model and presenter Lena Gercke serving as godmother,
and Princess Cruises’ Majestic Princess,
which debuted in China with renowned basketball legend Yao Ming and his wife Ye
Li presiding over the ceremony. We announced three additional Princess Cruises
ships, Golden Princess, Crown Princess
and Ruby Princess,will be outfitted with the technical requirements to transition
them to the Ocean Platform featuring Ocean MedallionTM. This cutting
edge interactive guest experience will be piloted later this year on Regal Princess. Also during the quarter,
Holland America Line along with O, The
Oprah Magazine, had its inauguralShare the Adventure cruise sailing from
Seattle to Alaska with a number of distinguished guests on board including
Oprah Winfrey. Additionally, Holland America Line received approval to operate
a series of cruises to Cuba beginning in December 2017 and Carnival Cruise Line
received approval for five additional Cuba cruises in 2018, following the debut
of its program in June of this year.
Donald
commented, “After the earthquakes in Mexico and a very challenging series of
hurricanes, our thoughts are with all of those impacted and we are actively
contributing to the relief and rebuilding efforts in the Caribbean and the
southern U.S. through monetary and other support. Many people throughout these
areas have been impacted and several ports are temporarily unavailable.
Fortunately, our owned destinations including Amber Cove, Dominican Republic;
Cozumel, Mexico; Mahogany Bay, Honduras; Half Moon Cay and Princess Cays,
Bahamas, as well as more than 40 other ports, plus all those in Mexico, are
fully operational and welcoming guests.” Donald added that several temporary
port closures associated with the storms led to voyage disruptions which are expected
to result in an estimated $0.10 to $0.12 per share reduction in earnings in the
fourth quarter. The company has resumed normal operations, with some itinerary
modifications and is continuing to deliver exceptional Caribbean cruise
vacations to its guests.
At this time,
cumulative bookings for the first half of next year are well ahead of the prior
year on both price and occupancy. Since June, booking volumes for the first
half of next year have been running ahead of last year at prices that are well
ahead.
Donald
added, “Our record results, coupled with strong booking trends, have more than
offset the anticipated earnings impact from these weather disruptions, enabling
us to raise the mid-point of our guidance and positioning us to achieve the higher
end of our previous earnings guidance range. Our performance affirms conviction
in our company’s inherent ability to deliver sustained double digit return on
invested capital in 2018 and beyond. We remain on track to achieve record cash
from operations of $5 billion this year, and to continue to distribute cash to
shareholders through steadily increasing dividends, currently totaling $1.2
billion annually, and opportunistic share repurchases, which are approaching $3
billion cumulatively over the past two years.”
The company
expects full year 2017 net revenue yields in constant currency to be up
approximately 4.0 percent compared to the prior year, better than June guidance
of up approximately 3.5 percent. The company expects full year net cruise costs
excluding fuel per ALBD in constant currency compared to the prior year to be
up approximately 2.5 percent versus June guidance of up approximately 1.5
percent. The cumulative impact of the recent weather related voyage disruptions
reduced forecasted full year net revenue yields by 0.4 percent and increased
full year net cruise cost guidance by 0.3 percent.
Changes in fuel prices
(including realized fuel derivatives) and currency exchange rates compared to
the prior year are expected to decrease earnings by $0.33 per share. Taking the
above factors into consideration, the company expects full year 2017 adjusted
earnings per share to be in the range of $3.64 to $3.70 compared to June
guidance of $3.60 to $3.70 and 2016 adjusted earnings per share of $3.45.
Fourth quarter
constant currency net revenue yields are expected to be up approximately 1.5 to
2.5 percent compared to the prior year. Excluding the estimated impact from
recent weather related voyage disruptions, fourth quarter constant currency
revenue yields would have been expected to increase approximately 3.5 percent,
1.5 percent higher than the mid-point of September guidance. Net cruise costs
excluding fuel per ALBD in constant currency for the fourth quarter of 2017 are
expected to increase by approximately 6 to 7 percent compared to the prior year
of which approximately 1.5 percent was due to the impact of the recent weather
related voyage disruptions and nearly 3 percent will be due to higher dry-dock
costs as previously anticipated. Changes in fuel prices (including realized
fuel derivatives) and currency exchange rates compared to the prior year are
expected to decrease earnings by $0.04 per share. Based on the above factors,
the company expects adjusted earnings per share for the fourth quarter 2017 to
be in the range of $0.44 to $0.50 versus 2016 adjusted earnings per share of
$0.67.
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Full Year 2017
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Fourth Quarter 2017
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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 3.5%
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Approx 4.0%
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4.0 to 5.0%
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1.5 to 2.5%
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Net cruise costs excl. fuel / ALBD
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Approx 2.5%
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Approx 2.5%
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8.0 to 9.0%
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6.0 to 7.0%
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Full Year 2017
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Fourth Quarter 2017
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Fuel price per metric ton
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$378
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$397
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Fuel consumption (metric tons in
thousands)
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3,305
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840
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Currency: Euro
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$1.13 to €1
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$1.19 to €1
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Sterling
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$1.28 to £1
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$1.35 to £1
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Australian dollar
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$0.77 to A$1
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$0.80 to A$1
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Three
Months Ended
August 31, |
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Nine
Months Ended
August 31, |
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2017
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2016
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2017
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2016
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Net income (in millions)
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$
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1,329
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$
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1,424
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$
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2,060
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$
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2,171
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Adjusted net income (in millions)
(a)
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$
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1,659
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$
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1,417
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$
|
2,318
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$
|
2,089
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Earnings per share-diluted
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$
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1.83
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$
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1.93
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$
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2.84
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$
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2.88
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Adjusted earnings per share-diluted (a)
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$
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2.29
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$
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1.92
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$
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3.19
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$
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2.77
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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.
