By Tess Stynes
Carnival Corp. said earnings in its most recent quarter more
than doubled as the cruise-ship company saw growth in a key revenue
metric and lower-than-expected cruise costs.
For the year ending in November, the company raised the lower
end of per-share earnings estimate by a nickel and now expects
$2.35 to $2.50.
For the current quarter, Carnival forecast per-share earnings of
$1.56 to $1.60, below estimates of analysts polled by Thomson
Reuters for per-share profit of $1.70.
Net revenue yields--a measure of revenue relative to
capacity--rose 4.1 %, above expectations for growth of 2 % to 3
%.
The cruise ship company, which operates Carnival Cruise Lines as
well as the Princess, Cunard and Holland America lines, among
others, has benefited in recent quarters from broad-based booking
strength and firmer pricing.
The company also has benefited from lower fuel costs. During the
latest quarter, Carnival reported fuel prices fell 37 % from a year
earlier.
Net cruise costs, excluding fuel and currency fluctuations,
increased 6.1 %, compared with the company's projection for an
increase of 6.5 % to 7.5 %.
Carnival said in a news release Tuesday that during the past 13
weeks, fleetwide booking volumes for the next three quarters were
well ahead of last year but pricing was slightly lower because of
foreign-exchange rates. The company also said its cumulative
advance bookings for the next three quarters are well ahead of a
year earlier, also at slightly lower prices as the result of
currency impacts.
Chief Executive Arnold Donald said Carnival is stepping up its
marketing spending for the rest of the year to further solidify its
base of business for 2016 and drive continued improvement in its
yields.
For the period ended May 31, Carnival reported a profit of $222
million, or 29 cents a share, up from $98 million, or 13 cents a
share, a year earlier. Excluding fuel derivatives impacts,
restructuring expenses and other items, per-share earnings rose to
25 cents from nine cents. The company expected per-share profit of
11 cents to 15 cents.
Revenue decreased 1.2 % to $3.59 billion, but was slightly above
analysts' expectations for $3.56 billion.
Overall costs declined to $3.3 billion from $3.49 billion.
Write to Tess Stynes at tess.stynes@wsj.com
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