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Carnival Corp Announces Q4 2014 Earnings

From Carnival Corp:
Carnival Corporation & plc announced non-GAAP net income for the full year 2014 of $1.5 billion, or $1.96 diluted EPS, compared to non-GAAP net income of $1.2 billion, or $1.58 diluted EPS, for the prior year. Full year 2014 U.S. GAAP net income was $1.2 billion, or $1.59 diluted EPS, which included unrealized losses (non-cash) on fuel derivatives of $268 million and $20 million of net charges. Full year 2013 U.S. GAAP net income was $1.1 billion, or $1.39 diluted EPS, which included net unrealized gains (non-cash) on fuel derivatives of $36 million and impairments and other charges of $190 million.

Revenues for the full year 2014 were $15.9 billion compared to $15.5 billion for the prior year. Cash from operations for the full year 2014 totaled $3.4 billion compared to $2.8 billion in 2013.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted, “Full year earnings were significantly higher than the prior year primarily due to strong profit improvement at both our Carnival Cruise Lines and Costa Cruises brands. We enjoyed some early wins from our collaboration efforts that contributed to our improved results, particularly for onboard revenues. We worked hard to contain costs and achieved an almost five percent reduction in fuel consumption for the year as we continue to implement energy conservation measures. We also made a number of strategic decisions in fleet investments that will position us well for the future.”

Commenting on the fourth quarter Donald stated, “Last quarter operating profit more than doubled due to higher ticket prices and onboard spending combined with lower costs, also exceeding previous guidance.” During the quarter, the Carnival Cruise Lines brand achieved a significant increase in revenue yields despite a highly competitive environment in the Caribbean. Additionally, Costa’s Asia operations achieved double-digit revenue yield improvement on a capacity increase in that region.

New ship introductions during the quarter generated substantial media coverage and positive buzz including the star-studded North American debut of Regal Princess which featured a reunion of the Love Boat cast and numerous guest stars who appeared on the hit TV show, as well as the delivery of Costa Diadema at a stunning and festive inaugural in Genoa, Italy. The company also recently placed orders with Italian shipbuilder Fincantieri for three innovative new ships for its Carnival Cruise Lines, Holland America Line and Seabourn brands to be delivered in 2018. In addition, the company recently sold three of its smaller vessels – Costa Celebration, Grand Holiday and Ocean Princess.

Key metrics for the fourth quarter 2014 compared to the prior year were as follows:

Revenues of $3.72 billion compared to $3.66 billion in the prior year.
On a constant dollar basis, net revenue yields (net revenue per available lower berth day or “ALBD”) increased 2.8 percent for 4Q 2014, which was better than the company’s September guidance, up 1.5 to 2.5 percent. Gross revenue yields decreased 0.2 percent in current dollars.
Net cruise costs excluding fuel per ALBD decreased 1.7 percent in constant dollars, which was in line with September guidance, down 1 to 2 percent. Gross cruise costs including fuel per ALBD in current dollars decreased 5.3 percent.
Fuel prices declined 13 percent to $584 per metric ton for 4Q 2014 from $671 per metric ton in 4Q 2013 and were better than the September guidance of $635 per metric ton.
Fuel consumption per ALBD decreased 4.8 percent in 4Q 2014 compared to the prior year.
Non-GAAP net income was $210 million, or $0.27 diluted EPS, before U.S. GAAP unrealized losses (non-cash) on fuel derivatives of $277 million, or $0.36 diluted EPS, and other charges of $35 million, or $0.04 diluted EPS.