MIAMI – Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) announced non-GAAP net income of $35 million, or $0.04
diluted EPS, for the fourth quarter of 2013 compared to non-GAAP net
income for the fourth quarter of 2012 of $111 million, or $0.14 per
For the fourth quarter of 2013, U.S. GAAP net income, which
included net unrealized gains on fuel derivatives of $31 million, was
$66 million, or $0.08 diluted EPS. For the fourth quarter of 2012, U.S.
GAAP net income was $93 million, or $0.12 diluted EPS. Revenues for the
fourth quarter of 2013 were $3.7 billion compared to $3.6 billion for
the prior year.
Non-GAAP net income for the full year 2013 was
$1.2 billion, or $1.58 diluted EPS, compared to non-GAAP net income of
$1.5 billion, or $1.94 diluted EPS, for the prior year. Full year 2013
U.S. GAAP net income was $1.1 billion, or $1.39 diluted EPS compared to
$1.3 billion, or $1.67 per share for the prior year. Revenues for the
full year 2013 were $15.5 billion compared to $15.4 billion for the
Carnival Corporation & plc President and Chief
Executive Officer Arnold Donald noted that fourth quarter earnings on a
non-GAAP basis were better than anticipated in the company’s September
guidance due primarily to better than expected cruise ticket prices and
onboard spending for Carnival Cruise Lines. Donald added, “Accelerated
progress in Carnival Cruise Lines’ brand recovery had a positive impact
on fourth quarter results. A steady stream of innovative product
initiatives, the launch of a nationwide marketing campaign and travel
agent outreach program, as well as an industry-leading vacation
guarantee fueled the brand’s improvement.”
Key metrics for the fourth quarter 2013 compared to the prior year were as follows:
On a constant dollar basis, net revenue yields (net revenue per
available lower berth day or “ALBD”) decreased 2.1 percent for 4Q 2013,
which was better than the company’s September guidance, down 3.0 to 4.0
percent. Gross revenue yields decreased 0.9 percent in current dollars.
Net cruise costs excluding fuel per ALBD increased 6.5 percent in
constant dollars, driven by higher advertising spend. Costs were higher
than September guidance, up 3.5 to 4.5 percent due primarily to the
timing of expenses. Gross cruise costs including fuel per ALBD in
current dollars increased 1.6 percent.
prices declined 6.3 percent to $671 per metric ton for 4Q 2013 from $716
per metric ton in 4Q 2012 and were better than the September guidance
of $687 per metric ton.
Commenting on full year 2013,
Donald stated, “Even in a challenging year, our company continued to
produce strong cash from operations approaching $3 billion, funding our
capital commitments and returning value to shareholders through regular
dividend distributions of $775 million and share repurchases of $100
Donald added that the company also made significant
strides on important strategic initiatives including the continued
enhancement of its fleet with the debut of Princess Cruises’
3,500-passenger Royal Princess and AIDA Cruises’ 2,200-passenger
AIDAstella. In addition, the company announced an order for a Seabourn
vessel expected in 2016 to replace the sale of the three original
Seabourn ships, which will exit the fleet during 2014 and 2015.
Furthermore, the company announced the retirement of an 800-passenger
Costa Cruises vessel.
Donald further commented that the
company’s flagship brand Carnival Cruise Lines also undertook a number
of strategic initiatives. The brand implemented a major travel agent
outreach program, Carnival Conversations, a series of roadshows reaching
thousands of agents across the country to better align with travel
partners. In addition, the brand launched a new advertising campaign
“Moments That Matter,” featuring the memorable vacation moments
experienced every day by millions of guests as captured through their
own images. The “Great Vacation Guarantee,” a one-of-a-kind hassle free
vacation guarantee was also introduced.
company increased efficiency fleetwide, achieving an additional five
percent reduction in fuel consumption per unit this year, bringing the
cumulative reduction to 23 percent since 2005. The company also
furthered its environmental efforts through the successful testing of
new “scrubber” technology and plans to install exhaust-gas cleaning
scrubbers throughout the fleet. Over the next few years, the company
will further refine both the scrubber design and installation process.
In addition to exceeding stricter air emission standards, this
technology will help mitigate higher fuel costs.
also realized major milestones in the emerging Asian cruise region this
year by doubling its presence in China, as well as launching its first
season of cruises originating from Japan. In addition, the company
opened ten sales offices throughout Asia to support its continued
expansion plans in this important emerging market.
Full Year 2014 Outlook
this time, cumulative advance bookings for 2014 are behind the prior
year at prices in line with prior year levels. Since September, booking
volumes for the first three quarters of 2014 are running well ahead of
last year’s levels at lower prices.
Donald noted, “We are
catching up on booking volumes and gaining momentum as we enter 2014. We
believe the compelling value we have in the marketplace will continue
to stimulate strong
demand leading to a solid wave period. We
continue to expect revenue yields to turn positive in the second half of
2014 compared to the prior year.”
Based on current booking
trends, the company forecasts full year 2014 net revenue yields, on a
constant dollar basis, to be down slightly compared to the prior year
(in line with the prior year on a current dollar basis). First quarter
revenue yields (constant dollars) are expected to decline 3 to 4 percent
compared to the prior year and improve during the remainder of 2014
based on a recovery in ticket prices.
The company expects net
cruise costs excluding fuel per ALBD for full year 2014 to be slightly
higher than the prior year on a constant dollar basis. Taking the above
factors into consideration, the company forecasts full year 2014
non-GAAP diluted earnings per share to be in the range of $1.40 to
$1.80, compared to 2013 non-GAAP diluted earnings of $1.58 per share.
forward, Donald stated, “With over 100 ships and more than 10 million
guests we have a scale advantage that cannot be replicated in this
industry. We are aggressively seeking opportunities to leverage that
scale to drive top line improvement and gain cost efficiencies. To
support that effort, we have realigned our leadership team and processes
to achieve greater collaboration and cooperation. We have heightened
our focus on the guest experience and further exceeding guest
expectations. As 2014 progresses, we will commence a number of strategic
initiatives designed to fuel our earnings power, drive cash flow and
improve return on invested capital over time.”
First Quarter 2014 Outlook
quarter constant dollar net revenue yields are expected to decrease 3
to 4 percent compared to the prior year. Net cruise costs excluding fuel
per ALBD for the first quarter are expected to be 4.5 to 5.5 percent
higher on a constant dollar basis compared to the prior year mostly due
to higher advertising costs.
Based on the above factors, the
company expects non-GAAP diluted losses for the first quarter 2014 to be
in the range of $(0.07) to $(0.11) per share versus 2013 non-GAAP
earnings of $0.09 per share.