Carnival Corp Reports Q3 2015 Earnings

Carnival Corp. announced non-GAAP net income of $1.4 billion, or $1.75 diluted EPS for the third quarter of 2015 compared to non-GAAP net income for the third quarter of 2014 of $1.2 billion, or $1.58 diluted EPS.

For the third quarter of 2015, U.S. GAAP net income, which included unrealized losses on fuel derivatives of $137 million, was $1.2 billion, or $1.56 diluted EPS down slightly from the prior year. For the third quarter of 2014, U.S. GAAP net income, which included net unrealized gains on fuel derivatives of $15 million, was $1.2 billion, or $1.60 diluted EPS.

Revenues for the third quarter of 2015 were $4.9 billion, in line with the prior year.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted, “Our third quarter non-GAAP performance was the strongest of any quarter on record with earnings $0.17 per share higher than the prior year despite a slight drag from the net impact of fuel prices and currency. Non-GAAP earnings for the quarter were also $0.17 higher than the mid-point of prior guidance. Net revenue yields improved 5 percent (constant currency) from the prior year benefiting from strong demand which led to higher occupancy levels, increased ticket prices and increased onboard spending. Clearly our ongoing investments in the guest experience, combined with our global marketing and public relations efforts along with our initiatives to leverage our scale are having a positive impact.”

Key metrics for the third quarter 2015 compared to the prior year were as follows:

On a constant dollar basis, net revenue yields (net revenue per available lower berth day or “ALBD”) increased 4.3 percent for 3Q 2015, better than June guidance of up 2 to 3 percent. Gross revenue yields decreased 2.1 percent in current dollars.

Net cruise costs excluding fuel per ALBD increased 1.0 percent in constant dollars, better than June guidance of up 2 to 3 percent due to the timing of certain expenses. Gross cruise costs including fuel per ALBD in current dollars decreased 9 percent.

Fuel prices declined 33 percent to $439 per metric ton for 3Q 2015 from $650 per metric ton in 3Q 2014 and were less than June guidance of $492 per metric ton.

Fuel consumption per ALBD decreased 2 percent in 3Q 2015 compared to the prior year.

Other highlights during the third quarter included Princess Cruises’ announcement that the Golden Princess will begin sailing out of Tianjin, China on a seasonal basis starting in 2016, which totals six Carnival Corporation vessels based in China, the largest capacity commitment from any cruise company. Additionally, it was announced in July that two vessels in the four-ship newbuild contract with Meyer Werft shipyard will be earmarked for Costa Cruises and will be the largest ships ever built based on guest capacity. Like the two previously announced AIDA Cruises ships that will also be constructed by Meyer Werft, the Costa ships will be powered at sea by Liquefied Natural Gas, the world’s cleanest burning fossil fuel. Last week, Carnival Corporation announced its new sustainability goals, which include a further reduction in CO2 emissions of 25 percent by 2020 from the company’s 2005 baseline, along with a fleetwide reduction in shipboard waste generation and improved water usage.