Carnival Corp. Reports Record Quarterly Earnings, Positive Advance Bookings

Carnival Cruise Line's Carnival Vista, one of several new Carnival Corporation vessels, has a slew of attractive features including this snazzy waterpark. // Photo by Seldon Ink

Carnival Corporation announced net income of $1.4 billion, or $1.93 diluted earnings per share (EPS), for third quarter 2016, which compares to $1.2 billion or $1.56 diluted EPS for the same period a year ago. 

Revenues for the third quarter of 2016 were $5.1 billion, $.2 billion higher than the $4.9 billion in the prior year. 

More positive news? Carnival also reported that cumulative advance bookings for the first half of next year are ahead of the prior year -- and at considerably higher prices.

In addition, the world's largest cruise company is projecting 25 percent earnings growth for the full year 2016.

“We delivered the strongest quarterly earnings in our company’s history affirming our ongoing efforts to expand consumer demand in excess of measured capacity increases and leverage our industry leading scale," said Arnold Donald, president and CEO, Carnival Corporation.

He said revenues during the peak summer season were bolstered by strong performances from both North American and European brands and across all major deployments including the Caribbean, Alaska and Europe.

Key Metrics

Key 2016 third quarter results, compared with the same period in 2015, were as follows:

Gross revenue yields (revenue per available lower berth day or “ALBD”) increased 0.6 percent. Net revenue yields on a constant currency basis increased 2.7 percent for Q3 2016, toward the top end of the June guidance range of up 2 to 3 percent.

Gross cruise costs including fuel per ALBD decreased 0.2 percent. Net cruise costs excluding fuel per ALBD on a constant currency basis increased 5.5 percent, better than June guidance of up 6 to 7 percent, due to the timing of certain expenses.

Changes in fuel prices and changes in currency exchange rates increased earnings by $.02 per share.

Quarterly Highlights

Showcasing its "third quarter highlights," the company cited the grand opening of the Arison Maritime Center in Almere, Netherlands, named for Micky Arison, Carnival Corporation's chairman, and his father, the late Ted Arison, who founded the cruise company.

The 110,000-square-foot purpose built facility is a major expansion from the existing training center that opened in 2009. It will provide comprehensive safety and skills training for bridge and engineering officers. It includes four bridge and engine room simulators and will train more than 6,500 officers annually across the company's 10 brands.

Another highlight mentioned was the memorandum of agreement the company signed recently with shipbuilders Meyer Werft and Meyer Turku for the construction of three new 180,000-ton cruise ships. Two of the ships, to be built in Finland, will be added to the Carnival Cruise Line fleet in 2020 and 2022.

The third ship, to be constructed in Germany, will join the P&O Cruises UK fleet in 2020. All three vessels will be fully powered by liquefied natural gas, the world’s cleanest burning fossil fuel. In conjunction with the new orders, delivery dates for two previously contracted ships for AIDA Cruises and Costa Cruises will shift from 2020 to 2021.

Global Outlook

At this time, cumulative advance bookings for the first half of 2017 are running ahead of the prior year at considerably higher prices. Since June, booking volumes for the first half of next year are lower than the prior year -- as there is less inventory remaining for sale -- at significantly higher prices.

Nieuw Amsterdam, a Holland America Line ship. // Photo by Holland America 

The company continues to expect its full year 2016 net revenue yields to be up approximately 3.5 percent compared to 205. 

The company continues to expect full year net cruise costs excluding fuel per ALBD to be up approximately 1.5 percent compared to the prior year. 

Full year 2016 earnings guidance has been adjusted upward in the range of $3.33 to $3.37 per share. That compares to the June guidance range of $3.25 to $3.35 and the 2015 adjusted earnings per share of $2.70.

“We are well on track to deliver nearly 25 percent earnings growth in 2016," said Donald. "With cash from operations expected to reach a record $5 billion this year, we continue to fund our growth and return cash to shareholders."

He noted that during the third quarter Carnival Corp. repurchased $700 million of its shares -- bringing the cumulative total to $2.5 billion in share repurchases over the past year.

“Looking forward, we are well positioned for continued earnings growth given the current strength of our booking and pricing trends in 2017," Donald said. 

Fourth Quarter 2016 Outlook

Fourth quarter net revenue yields are expected to be up 3 percent compared to the prior year. Fourth quarter net cruise costs excluding fuel per ALBD are expected to be up 1 percent compared to the prior year.

Based on the above factors, the company expects adjusted earnings per share for the fourth quarter 2016 to be in the range of $.55 to $.59 versus 2015 adjusted earnings per share of $.50.

Carnival operates 10 cruise brands including Carnival Cruise Line, Fathom, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, P&O Cruises (Australia) and P&O Cruises (UK). Together, these brands operate 101 ships with 225,000 lower berths. Eighteen new ships are slated for delivery through 2022.

Carnival Corporation also operates Holland America Princess Alaska Tours, which operates in Alaska and the Canadian Yukon.

For the full earnings report, visit

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