Editors note: Keep an eye on the 2019 outlook. They’re forecasting net income to be a bit flat this year due to rising bunker costs and unfavorable conversion rates. As of Friday morning their stock dropped $9 from two days ago. Will be curious to see how it acts on Friday. You can see all the major lines stocks at the bottom of our home page.

Carnival Conquest Sailing from Port Everglades ©CruiseInd

Carnival Conquest Sailing from Port Everglades 11/6/2016

Carnival Corporation & plc  announced U.S. GAAP net income for the full year 2018 of $3.2 billion, or $4.44 diluted EPS, compared to $2.6 billion, or $3.59 diluted EPS, for the prior year. Full year 2018 adjusted net income of $3.0 billion, or $4.26 adjusted EPS, was higher than adjusted net income of $2.8 billion, or $3.82 adjusted EPS, for the full year 2017. Adjusted net income excludes for the full year 2018 unrealized gains and losses on fuel derivatives and other net gains, totaling $123 million in net gains and for the full year 2017 unrealized gains and losses on fuel derivatives of $227 million in net gains and impairments and other net charges of $390 million. Revenues for the full year 2018 were $18.9 billion, $1.4 billion higher than the $17.5 billion in the prior year.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted, “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 five percent, 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.”

Key information for the fourth quarter of 2018 compared to the fourth quarter of 2017:

  • U.S. GAAP net income for 4Q 2018 of $494 million, or $0.71 diluted EPS, compared to $546 million or $0.76 diluted EPS, for the prior year. On an adjusted basis, 4Q 2018 net income of $492 million, or $0.70 EPS, compared to net income of $452 million, or $0.63 EPS, for the prior year. Adjusted net income excludes unrealized gains and losses on fuel derivatives and other net charges, totaling $2 million in net gains for 4Q 2018 and $94 million of net gains for 4Q 2017.

  • Gross cruise revenues for 4Q 2018 of $4.4 billion compared to $4.2 billion for the prior year, an increase of 4.3 percent. In constant currency, net cruise revenues of $3.7 billion compared to $3.5 billion, an increase of 6.1 percent.

  • Gross revenue yields (revenue per available lower berth day or “ALBD”) increased 1.9 percent. In constant currency, net revenue yields increased 3.7 percent for 4Q 2018, better than September guidance of up 1.5 to 2.5 percent.

  • Gross cruise costs including fuel per ALBD increased 2.4 percent. In constant currency, net cruise costs excluding fuel per ALBD decreased 0.5 percent, compared to September guidance of down 1.0 to 2.0 percent.

  • Changes in fuel prices (including realized fuel derivatives) and currency exchange rates decreased earnings by $0.13 per share.

2019 Outlook

First Quarter 2019 Outlook

First quarter constant currency net revenue yields are expected to be flat with the prior year. Net cruise costs excluding fuel per ALBD in constant currency for the first quarter of 2019 are expected to increase by approximately 2.0 percent compared to the prior year. Changes in fuel prices (including realized fuel derivatives) and changes in currency exchange rates compared to prior year are expected to decrease earnings by $0.03 per share. Based on the above factors, the company expects adjusted earnings per share for the first quarter 2019 to be in the range of $0.40 to $0.44 versus 2018 adjusted earnings per share of $0.52.

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