Carnival Shares Rise as Results Top Expectations
June 28 2016 - 11:00AM
Dow Jones News
Carnival Corp. said its earnings soared in its latest quarter as
the cruise-ship company benefited from lower costs and
better-than-expected revenue.
Shares rose 5% to $45.82 in recent trading as per-share
earnings, excluding certain one-time items, topped
expectations.
"This is shaping up to be another strong year," Chief Executive
Arnold Donald said in prepared remarks Tuesday touting its recent
dividend increase and the board's approval on Monday of the
repurchase of an additional $1 billion shares of the company's
stock.
Shares of Carnival Corp. have declined 7.6%, along with the
broader travel sector, since Britain's vote to leave the European
Union last week.
Carnival did project earnings for the current quarter below
analysts' expectations. The company forecast per-share earnings of
$1.83 to $1.87, while analysts polled by Thomson Reuters expected
per-share profit of $1.98.
Carnival, which is dual-listed in the U.S. and the U.K., has
benefited in recent quarters from low fuel prices, higher prices
and strong bookings.
In its press release Tuesday, Carnival said bookings for the
rest of the year are well ahead of the prior year at slightly
higher prices. The company, which operates Carnival Cruise Lines as
well as the Princess, Cunard and Holland America lines, also said
that since March, bookings have been at higher prices but volumes
have been running lower because there is less available inventory
remaining this year.
For the period ended May 31, Carnival reported a profit of $605
million, or 80 cents a share, up from $222 million, or 29 cents a
share, a year earlier. Excluding fuel-hedging impacts and other
items, per-share earnings rose to 49 cents from 25 cents. The
company had forecast adjusted per-share profit of 34 cents to 38
cents.
Revenue increased 3.2% to $3.7 billion; analysts had expected
revenue of $3.68 billion.
Excluding currency effects, net revenue yields—a measure of
revenue relative to capacity—rose 3.6%, above the company's
guidance for an increase of 1.5% to 2.5%.
Excluding fuel expenses, net cruise costs decreased 1.9%,
compared with estimates for an increase of between 0.5% and 1.5%.
The company attributed the lower costs to a shift in the timing of
expenses.
For the fiscal year ending in November, the company narrowed its
per-share earnings estimate to $3.25 to $3.35 on a 3.5% increase in
net revenue yields, excluding currency fluctuations. The company
previously had projected per-share profit of $3.20 to $3.40 and net
revenue yield growth of roughly 3%, excluding currency
fluctuations.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
June 28, 2016 10:45 ET (14:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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