Carnival Off to a Strong Start

Carnival Corporation & plc recorded a net income of USD 49 million in its results for the first quarter ended February 28, 2015 after a net loss of USD 20 million in the same period in 2014.

First quarter net revenue yields in constant dollars increased 2.0% compared to the prior year, which was better than the company’s December guidance of flat to up 1%, Carnival said.

“The year is off to a strong start achieving significantly higher earnings than the prior year and our previous guidance. Our onboard revenue initiatives drove particularly strong improvement in the first quarter with onboard yields more than 8 percent higher than prior year (constant dollar),” President and Chief Executive Officer Arnold Donald said.

Donald also noted that the Carnival Cruise Line brand continued to outperform, achieving significant revenue yield growth and remains on track for a strong year.

Additionally, Costa’s Asia operations achieved double-digit revenue yield growth, affirming the pent-up demand in the region and building confidence in the long-term potential for growth.

“We are experiencing an ongoing improvement in underlying fundamentals based on our successful initiatives to drive demand. Our efforts to further elevate our guest experience are clearly resonating with consumers and, notably, improving the frequency and retention of our loyal guests,” Donald said.

Based on current booking strength, the company expects full year 2015 net revenue yields to increase 3 to 4 % on a constant currency basis, which excludes translation and transactional currency impacts, compared to the prior year.

Since December, unfavorable changes in currency exchange rates (constant currency) have reduced full year 2015 earnings expectations by USD 219 million, according to Carnival.

However, this impact has been significantly offset by the improvement in the company’s operating performance, resulting in  a USD 0.05 reduction to the midpoint of December guidance. Taking the above factors into consideration, the company forecasted full year 2015 nonGAAP diluted earnings per share to be in the range of USD 2.30-2.50.

Looking forward, Donald stated, “Consistent with many global companies, the strengthening of the U.S. dollar has hampered our full year earnings expectations, masking the 3 to 4 percent (constant currency) yield increase our collective brands are expecting to achieve. Our successful initiatives to drive both ticket and onboard revenue yields have improved our financial performance and we remain on track toward our goal of achieving double-digit return on invested capital in the next three to four years.”