Carnival Corp has announced higher revenues and net income for the first quarter of this year.
On the US GAAP basis, net income was $391 mill, or $0.54 diluted EPS, for 1Q18, an increase from the $352 mill, or $0.48 diluted EPS recorded in 1Q17. First quarter 2018 adjusted net income of $375 mill, or $0.52 adjusted EPS, was also higher than the adjusted net income of $279 mill, or $0.38 adjusted EPS, reported for 1Q17. Revenues for 1Q18 of $4.2 bill were up from the $3.8 bill reported for the same period in 2017.
Carnival Corp President and CEO, Arnold Donald (pictured), said, “We are off to a strong start to the year achieving another quarter of record earnings on record revenues and exceeding the high end of guidance.
“This strong operational execution affirms our efforts to create demand in excess of measured capacity growth and exceed guest expectations once on board. Our guest experience efforts, coupled with our ongoing marketing and public relations programmes are clearly accelerating cruise demand across the board to drive cruise ticket prices higher,” he said.
Key information for 1Q18 compared to the previous year:
⦁ Gross revenue yields (revenue per available lower berth day or ALBD) increased 9.2% In constant currency, net revenue yields increased 3.9% for 1Q18, better than December guidance of up 1.5 to 2.5%.
⦁ Gross cruise costs including fuel per ALBD increased 9%. In constant currency, net cruise costs excluding fuel per ALBD increased 1%, better than December guidance of up 2 to 3%, principally due to the timing of expenses between quarters.
⦁ Changes in fuel prices (including realised fuel derivatives) decreased earnings by $0.04 per share, offset by an increase in earnings due to changes in currency exchange rates of $0.04 per share.
Highlights from the first quarter include the signing of agreements with German shipbuilder Meyer Werft to build two new cruise ships that will be powered by LNG. The first is earmarked for P&O Cruises (UK) to be delivered in 2022 and the second for AIDA Cruises in 2023.
As for this year’s outlook, by the middle of March, cumulative advanced bookings for the remainder of 2018 are in line with the previous year at higher prices. Since January, booking volumes for all future periods have been running ahead of 2017 at higher prices.
Donald added, “The booking strength achieved during this year’s wave season, outpacing even last year’s record levels, demonstrates sustained strong demand for our world’s leading cruise brands and delivers further confidence in our raised earnings guidance.
“We remain on track to achieve double-digit return on invested capital, while continuing to return cash to shareholders through ongoing share repurchases and dividend growth,” he said.
Based on current booking trends, the company said that it expected full year 2018 net revenue yields in constant currency to be up by around 2.5%, compared to 2017, in line with December guidance. The company also expected full year net cruise costs, excluding fuel per ALBD in constant currency, compared to the previous year to be up about 1%, also in line with December guidance.
Changes in fuel prices (including realised fuel derivatives) and currency exchange rates are expected to increase earnings by 0.10 per share compared to December‘s guidance.
Taking the above factors into consideration, the company expects full year 2018 adjusted earnings per share to be in the range of $4.20 to $4.40, compared to December guidance of $4 to $4.30 and 2017 adjusted earnings per share of $3.82.
Second quarter 2018 constant currency net revenue yields are expected to be up around 2.5 to 3.5%, compared to the previous year. Net cruise costs, excluding fuel per ALBD in constant currency, for 2Q18 are expected to increase by about 4 to 5%, compared to the previous year.
Based on the above, Carnival expects adjusted earnings per share for 2Q18 to be in the range of $0.56 to $0.60 versus 2017 adjusted earnings per share of $0.52.
