Carnival Announces Q3 Earnings

Carnival Corporation & plc announced U.S. GAAP net income of $1.3 billion, or $1.83 diluted EPS, for the third quarter of 2017 compared to U.S. GAAP net income for the third quarter of 2016 of $1.4 billion, or $1.93 diluted EPS. Third quarter 2017 adjusted net income of $1.7 billion, or $2.29 adjusted EPS, was higher than adjusted net income of $1.4 billion, or $1.92 adjusted EPS, for the third quarter of 2016. Adjusted net income excludes unrealized gains on fuel derivatives of $65 million and impairments and other net charges of $395 million for the third quarter 2017 and net gains of $7 million for the third quarter 2016. Revenues for the third quarter of 2017 of $5.5 billion were higher than the $5.1 billion in the prior year.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald stated, “We delivered another consecutive quarter of strong operational improvement and another third quarter adjusted earnings record. Our ongoing efforts to create demand well in excess of measured supply growth helped to drive five percent higher cruise ticket pricing. We have many innovative efforts to accelerate demand in 2018 and beyond including our recently announced digital streaming channel, OceanView, and our mobile gaming portfolio, PlayOcean, both launching this week.” The company will launch OceanView and PlayOcean at a public relations event in New York City’s Time Squareon September 28th between 11 a.m. and 1 p.m.

Key information for the third quarter 2017 compared to the prior year:

  • Gross revenue yields (revenue per available lower berth day or “ALBD”) increased 5.5 percent. In constant currency, net revenue yields increased 5.1 percent for 3Q 2017, better than June guidance of up approximately 4.0 percent.
  • Gross cruise costs including fuel per ALBD increased 12.4 percent (including ship impairment charges). In constant currency, net cruise costs excluding fuel per ALBD increased 0.2 percent, in line with June guidance of approximately flat.
  • Changes in fuel prices (including realized fuel derivatives) and currency exchange rates decreased earnings by $0.03 per share.
  • Noncash impairment charges for ships, trademark and goodwill of $392 million driven by the company’s decision to strategically realign its business in Australia.

Highlights from the third quarter include the official naming ceremonies for AIDA Cruises’ AIDAperla, which was christened in Palma de Mallorca with German model and presenter Lena Gercke serving as godmother, and Princess Cruises’ Majestic Princess, which debuted in China with renowned basketball legend Yao Ming and his wife Ye Li presiding over the ceremony. We announced three additional Princess Cruises ships, Golden Princess, Crown Princess and Ruby Princess, will be outfitted with the technical requirements to transition them to the Ocean Platform featuring Ocean MedallionTM. This cutting edge interactive guest experience will be piloted later this year on Regal Princess. Also during the quarter, Holland America Line along with O, The Oprah Magazine, had its inaugural Share the Adventure cruise sailing from Seattle to Alaska with a number of distinguished guests on board including Oprah Winfrey. Additionally, Holland America Line received approval to operate a series of cruises to Cuba beginning in December 2017 and Carnival Cruise Line received approval for five additional Cuba cruises in 2018, following the debut of its program in June of this year.

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