Carnival issues profit warning on oil price, weather and geopolitics

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 26 September 2019 26 September 2019

Carnival Corporation & plc, the Anglo-American cruise shipping group, has issued a profit warning, citing several different factors as causes of the weakening outlook

The company now expects full financial year year 2019 adjusted earnings per share to be in the range of $4.23 to $4.27, reflecting recent fuel price increases, compared to June guidance of $4.25 to $4.35 and 2018 adjusted earnings per share of $4.26.

Weather related voyage disruptions, the tensions in the Arabian Gulf and a ship delivery delay are expected to have a financial impact of $0.04 to $0.06 per share compared to June guidance. Changes in fuel prices and currency exchange rates are expected to decrease earnings by $0.08 per share also compared to June guidance.

A further reduction in guidance for ticket and onboard revenue worth $0.06 per share in part contributed to by the high level of close-in voyage disruptions was also offset.

“However, due to an $0.08 impact from the recent spike in fuel prices caused by geopolitical events, we are reducing our full year guidance for 2019 by $0.05 per share," Carnival said in a statement.

Based on current booking trends, the company expects full year 2019 constant currency net cruise revenues to be up approximately 4.0%, with capacity growth of 4.2%

“The company continues to expect its North America & Australia segment yields to be up for the year, but slightly less than previous guidance while its Europe & Asia segment is still expected to be down for the year but slightly more than previous guidance,” it said.

 

The company expects full year net cruise costs excluding fuel per ALBD in constant currency to be up approximately 0.3 %versus the prior year compared to June guidance of up approximately 0.7%.

Carnival Corporation & plc reports record third quarter in challenging year

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 26 September 2019 26 September 2019

Carnival Corporation & plc, the world’s largest cruis shipping group, reported record earnings for its third quarter, but also stated that this is a challenging year.

Group net income rose to $1,.78 billion in threemonths to 31 August from $1.71 billion in the same period last year, while operating income increased to $.189 billion from $1.79 billion. Revenues rose to $6.33 billion from $5.84 billion.

In the  first nine months of its financial year, the groip rccorded a net profit of $2.57 billion compared to $2.66 billion year on, with operating income edging higher to $2.79 billion from $2.77 billion. Revenues increased to $16.04 billion from $1.43 billion.

President and Chief Executive Officer Arnold Donald said in a statement: "I thank our 150,000 global employees for their efforts to deliver a record quarter in an otherwise challenging year. We achieved additional cost improvements largely driven by leveraging our scale, offsetting the earnings impact due to voyage disruptions from the combined impact of Hurricane Dorian, the tensions in the Arabian Gulf and the delayed delivery of Costa Smeralda.”

Gross revenue yields -revenue per available lower berth day or "ALBD" -  increased 5.6%. In constant currency, net revenue yields decreased 0.5%, in line with June guidance of down slightly to flat.

Gross cruise costs including fuel per ALBD increased 9.4%. In constant currency, net cruise costs excluding fuel per ALBD decreased 3.2%, better than June guidance of up 0.5% to 1.5%, due to the timing of expenses between quarters and cost improvements realized during the quarter.

Changes in fuel prices increased earnings by $0.07 per share, offset by a decrease in earnings due to changes in currency exchange rates of $0.07 per share compared to the prior year. Compared to June guidance, changes in fuel prices and currency exchange rates decreased earnings by $0.03 per share.

Highlights from the third quarter included Carnival Cruise Line's partnership with Thrillist to create Island Hoppers, the first-ever comedy competition show at sea. Princess Cruises announced Phantom Bridge, a first-of-its-kind game combining digital and physical elements for the ultimate immersive escape room, which will launch onboard Sky Princess and Enchanted Princess.

AIDAnova was the first-ever cruise ship to be awarded the prestigious Blue Angel certification for excellence in environmentally friendly ship design by Germany's Federal Ministry for the Environment. Additionally, during the quarter, the company released its 2018 Sustainability Report, detailing the key initiatives and progress made in 2018 toward its 2020 sustainability performance goals.