Carnival Corp. posts strong third quarter results
The Anglo-American multinational cruise giant, Carnival Corporation & plc. posted better-than-expected third quarter profit and improved its full-year guidance, citing strong demand in China for Asian cruises.
Profit in the third quarter rose to $1.2 billion compared to $934 million in Q3 2013, while revenue increased to nearly $5 billion.
Carnival Corp. now forecasts adjusted earnings of between $1.84 and $1.88 per share for fiscal year 2014 (ending November 30th), compared to its previous prediction of $1.60-$1.75.
Arnold Donald, Carnival Corp. CEO, noted that stronger demand and greater spending by passengers on board drove third quarter results, as well as pushing up year-over-year earnings by 15%.
Business in the Asian region was particularly strong, driven by a double-digit yield increase in its China program.
Mr. Donald added:
“Our continental European operations also enjoyed strong yield and profit improvement in the quarter, reflecting continued progress for the Costa brand. In addition, our summer Caribbean product successfully attracted nearly 20% more guests than the prior year, reinforcing the popularity of the world’s largest cruising region.”
In May 2014, Carnival Corp. added its 4th ship to the China program.
Cumulative advance bookings for H1 2015 are higher than at this time last year at higher prices. During the last quarter, booking volumes for the first half of 2015 were ahead of last year at higher prices.
Installation of new technology
The world’s largest cruise ship operator said it plans to install new air emissions technology as well as other upgrades to improve fuel efficiency in 2015. By 2016, it expects 70% of its fleet to have ‘scrubber’ technology (exhaust gas cleaning system) installed, allowing it to meet more stringent air emission standards due to be imposed in 2015.
New regulations will lead to higher fuel costs next year, Carnival Corp. said. The increase will be offset by about 50% in 2016 and nearly completely by 2017.
Mr. Donald said:
“Our implementation of the air emissions technology is a sound investment in our company’s future and more importantly it will benefit the environment for years to come.”
“These technology investments are laying a solid foundation towards sustainable earnings improvement. Combined with our other strategic initiatives designed to foster revenue growth and contain costs, we are gaining momentum towards our goal of achieving double digit returns on investment over time.”