Hurricanes to Hit Carnival Corp’s 4Q Earnings
Miami-based cruise giant Carnival Corporation & plc expects to see a decrease in its fourth quarter earnings, affected by several temporary port closures amid hurricanes, which led to voyage disruptions.
After the earthquakes in Mexico and “a very challenging series of hurricanes,” Carnival said that the voyage disruptions are expected to result in an estimated USD 0.10 to USD 0.12 per share reduction in earnings in the fourth quarter of 2017.
Although the company resumed normal operations, there are still some itinerary modifications as several ports are temporarily unavailable, Arnold Donald, Carnival Corporation & plc President and Chief Executive Officer, said.
Donald added that the company’s owned destinations including Amber Cove, Dominican Republic; Cozumel, Mexico; Mahogany Bay, Honduras; Half Moon Cay and Princess Cays, Bahamas, as well as more than 40 other ports, plus all those in Mexico, “are fully operational and welcoming guests.”
The company unveiled the fourth quarter outlook as part of its third quarter 2017 financial report, in which it said that its US GAAP net income reached USD 1.3 billion for the period, compared to US GAAP net income of USD 1.4 billion seen in the third quarter of 2016.
Revenues for the third quarter of 2017 increased to USD 5.5 billion from USD 5.1 billion reported in the same quarter in the prior year.
“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,” Donald said.
Gross revenue yields increased 5.5 percent. In constant currency, net revenue yields increased 5.1 percent for the third quarter of 2017, better than June guidance of up approximately 4 percent.
Carnival said that, at this time, cumulative bookings for the first half of next year “are well ahead of the prior year on both price and occupancy.”
“Our record results, coupled with strong booking trends, have more than offset the anticipated earnings impact from these weather disruptions, enabling us to raise the mid-point of our guidance and positioning us to achieve the higher end of our previous earnings guidance range,” Donald said, adding that the company remains on track to achieve record cash from operations of USD 5 billion this year.