Carnival Corp reports higher net income and revenues last year

2019-01-13T22:51:51+00:00 January 13th, 2019|Finance|

Carnival Corporation reported US GAAP net income for the full year 2018 of $3.2 bill, or $4.44 diluted earnings per share, compared to $2.6 bill, or $3.59 diluted EPS, for the previous year.
Full year 2018 adjusted net income of $3 bill, or $4.26 adjusted EPS, was higher than adjusted net income of $2.8 bill, or $3.82 adjusted EPS, for 2017.
Adjusted net income excludes unrealised gains and losses on fuel derivatives and other net gains in 2018, totalling $123 mill in net gains and for 2017 unrealised gains and losses on fuel derivatives of $227 mill in net gains and impairments and other net charges of $390 mill, Carnival said.
Revenues for last year were $18.9 bill, $1.4 bill higher than the $17.5 bill recorded in 2017.
Carnival Corp President and CEO, Arnold Donald (pictured), said: “We delivered strong fourth quarter earnings and record adjusted fourth quarter earnings to top off a record breaking year. In 2018, we grew net cruise revenue (constant currency) over 5%, achieving the highest revenue yields (constant currency) in our company’s history, and producing double-digit adjusted earnings growth despite a significant drag from fuel and currency.
“More importantly, we achieved double-digit return on invested capital in line with the target we established five years ago. I thank our 120,000 team members around the globe who encountered multiple headwinds and still delivered for our shareholders a more than doubling of return on invested capital in just five years, as well as our valued travel agent partners whose strong support enabled these record results,” he said.
Key information for the fourth quarter of 2018, compared to the fourth quarter of 2017:
⦁ US GAAP net income was $494 mill, or $0.71 diluted EPS, compared to $546 mill or $0.76 diluted EPS, for 4Q17. On an adjusted basis, 4Q18 net income of $492 mill, or $0.70 EPS, compared to net income of $452 mill, or $0.63 EPS, for the previous year. Adjusted net income excludes unrealized gains and losses on fuel derivatives and other net charges, totalling $2 mill in net gains for 4Q18 and $94 mill of net gains for 4Q17.
⦁ Gross cruise revenues for 4Q18 of $4.4 bill, compared to $4.2 bill for 4Q17, an increase of 4.3%. In constant currency, net cruise revenues of $3.7 bill, compared to $3.5 bill, an increase of 6.1%.
⦁ Gross revenue yields (revenue per available lower berth day or ALBD) increased 1.9%. In constant currency, net revenue yields increased 3.7% for 4Q18, better than September guidance of up 1.5 to 2.5%.
⦁ Gross cruise costs including fuel per ALBD increased 2.4%. In constant currency, net cruise costs excluding fuel per ALBD decreased 0.5%, compared to September guidance of down 1 to 2%.
⦁ Changes in fuel prices (including realised fuel derivatives) and currency exchange rates decreased earnings by $0.13 per share.
At the time of this announcement, cumulative advance bookings for full year 2019 were considerably ahead of 2018 at prices that are in line with last year, Carnival said.
Pricing on bookings taken since September were running in line on a comparable basis to the previous year, while booking volumes were significantly higher compared to 2018. As a result, even with higher capacity, there is less inventory remaining for sale than at the same time last year.
Donald said: “Based on continued strength in underlying fundamentals, we are poised to deliver another year of strong revenue and earnings growth, with booking volumes running significantly ahead of our higher capacity growth and net revenue yields expected to exceed last year’s record levels (constant currency). We remain committed to driving demand in excess of measured capacity growth to continue the momentum into 2019 and beyond.”
Based on current booking trends, the company expects full year 2019 constant currency net cruise revenues to be up by about 5.5%, with capacity growth of 4.6% and net revenue yields in constant currency expected to be up around 1%, compared to the previous year.
In addition, the company expects full year net cruise costs excluding fuel per ALBD in constant currency to be up around 0.5%.
Changes in fuel prices (including realised fuel derivatives) and currency exchange rates are expected to increase earnings by $0.14 per share compared to the previous year. Voyage cancellations due to the delayed delivery of ’AIDAnova’ have impacted 2019 earnings by $0.04 per share.
Taking the above factors into consideration, the company expects full year 2019 adjusted earnings per share to be in the range of $4.50 to $4.80, compared to 2018 adjusted earnings per share of $4.26.
Donald added: “Based on the foundation we have put in place we are well positioned to continue to drive shareholder returns as we execute along a path toward growing earnings and return on invested capital over time. We remain committed to the continued distribution of cash to shareholders through increasing dividends, currently totalling $1.4 bill annually, and opportunistic share repurchases, which have reached $4.6 bill since late 2015.”