|Carnival Corporation's brands, including Holland America, whose Eurodam is shown above in early March at Port Everglades, FL, are seeing strong advance bookings. // Photo by Susan J. Young|
Reporting first quarter 2016 earnings, Carnival Corporation announced adjusted net income of $301 million compared to $159 million for the same quarter a year ago. Revenues for the first quarter of 2016 were $3.7 billion compared to $3.5 billion in the prior year.
“Our teams delivered another strong quarter of operational improvement by creating increased demand for our brands and leveraging our scale which resulted in revenue yield improvement approaching six percent and the near doubling of first quarter adjusted earnings," said Arnold Donald, Carnival Corporation's president and CEO. He thanked the line's loyal guests and travel professional partners for the good results.
|Arnold Donald, president and CEO, Carnival Corporation, thanked travel partners.|
Highlights for first quarter 2016 compared to first quarter 2015 are:
Net revenue yields (net revenue per available lower berth day or “ALBD”) increased 5.7 percent, better than the company’s December guidance of up 3.5 to 4.5 percent. Gross revenue yields decreased .4 percent due to changes in currency exchange rates.
Net cruise costs excluding fuel per ALBD increased 1.6 percent and were lower than December guidance, up 2.5 to 3.5 percent, due to the timing of expenses between quarters. Gross cruise costs including fuel per ALBD decreased 6 percent due to changes in fuel prices and currency exchange rates.
Changes in fuel prices increased earnings by $.03 per share.
Cumulative advance bookings for the rest of 2016 are well ahead of last year's at slightly higher prices, the company said. Since January, booking volumes for the remainder of the year are running ahead of last year’s historically high levels at higher prices.
"Our ongoing guest experience innovations coupled with our increasingly effective marketing and communication efforts have driven additional demand for our brands, resulting in a strong booked position," said Arnold.
He also said that lower levels of inventory remaining for sale for the balance of the year, particularly for the peak summer period, positions Carnival's brands well for continued revenue yield growth and builds confidence in our full year earnings forecast.
“Additionally, the underlying strength of our operating performance, leading to sustained earnings and cash flow growth, has accelerated the return of capital to shareholders through our stepped up share repurchase program," Arnold said. Since resuming the share repurchase program, the company has bought back 27 million shares -- returning $1.3 billion to shareholders in the last six months.
On a constant currency basis, compared to the prior year, the company continues to expect full year 2016 net revenue yields to increase approximately 3 percent. It also expects net cruise costs excluding fuel per ALBD for full year 2016 to be up approximately 2 percent.
Based on current booking strength, the company forecasts full year 2016 adjusted earnings per share in the range of $3.20 to $3.40, compared to December guidance of $3.10 to $3.40 and 2015 adjusted earnings of $2.70 per share.
As for the second quarter 2016, Carnival Corp. said net revenue yields are expected to increase 1.5 to 2.5 percent compared to the prior year. Net cruise costs excluding fuel per ALBD for the second quarter are expected to be up .5 to 1.5 percent compared to the prior year.
Carnival also cited brand highlights involving new ships. The German AIDA brand has launched the new AIDAprima and Holland America Line is welcoming the new Koningsdam. Carnival Vista will begin service in late April while Seabourn Encore will launch in November.
In addition, P&O Cruises (Australia) recently announced that Pacific Pearl will leave the fleet in April 2017, consistent with the company’s long-term strategy of removing less efficient ships from its fleet as new capacity is introduced.
The company also cited its approval last week from the Cuban government for cruises from the U.S. to Cuba. The company is the first U.S. based operator to be granted approval. The company’s newest brand, fathom, will begin seven-day cruises to Cuba in early May onboard the 700-passenger Adonia initially visiting Havana, Cienfuegos and Santiago de Cuba.