(News Release)
MIAMI (March 25, 2014) – Carnival Corporation & plc
(NYSE/LSE: CCL; NYSE: CUK) announced non-GAAP net income of $2 million, or $0.00
diluted EPS for the first quarter of 2014 compared to non-GAAP net income for
the first quarter of 2013 of $67 million, or $0.08 diluted EPS.
For the first
quarter of 2014, U.S. GAAP net loss, which included net unrealized losses on
fuel derivatives of $17 million, was $15 million, or $0.02 diluted loss per
share. For the first quarter of 2013, U.S. GAAP net income was $37 million, or
$0.05 diluted earnings per share.
Revenues for the first quarter of 2014 were $3.6 billion in line with
the prior year.
Carnival Corporation & plc President and Chief Executive
Officer Arnold Donald noted that first quarter non-GAAP earnings were better
than anticipated in the company’s December guidance due to better than expected
ticket prices for Carnival Cruise Lines and our continental European brands, as
well as the timing of certain expenses.
Donald noted, “We see progress with our continental
European brands and continue to be pleased with Carnival Cruise Lines’ pace of
improvement. Exciting product innovations and strategic marketing initiatives at
Carnival Cruise Lines have driven strong close-in demand resulting in
sequential improvement in year-over-year quarterly ticket prices for the brand.”
During the quarter, Carnival Cruise Lines announced an exclusive partnership
with Dr. Seuss Enterprises to bring the beloved children’s brand and favorite
characters to its fleet and the Carnival LIVE Concert Series, which brings the
best in live music to the seas with a diverse roster of popular music artists
including Jennifer Hudson, Lady Antebellum and Jewel. These brand building initiatives complement the
continued roll-out of its Fun Ship 2.0 product enhancement program, as well as ongoing
travel agent outreach and the unprecedented Great Vacation Guarantee. In
addition, Carnival Cruise Lines was the national cruise line advertiser of the
Sochi 2014 Olympic Winter Games, with its creative “Bobslide” campaign which targeted
the family segment and furthered the brand’s new marketing campaign launched
last fall.
Key metrics for the first quarter 2014 compared to first quarter 2013
and December guidance 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 1Q 2014. Gross revenue yields decreased 1.9 percent in current
dollars.
·
Net cruise costs excluding fuel
per ALBD increased 3.3 percent in constant dollars driven by higher advertising
spend. Costs were better than December guidance, up 4.5 to 5.5 percent
primarily due to the timing of certain expenses. Gross cruise costs including
fuel per ALBD in current dollars were flat.
·
Fuel prices declined 3.4 percent
to $654 per metric ton for 1Q 2014 from $677 per metric ton in 1Q 2013 but were
higher than December guidance of $643 per metric ton.
·
Fuel consumption per ALBD
decreased 4.8 percent in 1Q 2014 compared to the prior year.
2014 Outlook
Since January, booking volumes for the remainder of the
year are running well ahead of last year at lower prices. At this time,
cumulative advance bookings for the remainder of 2014 are ahead of the prior
year at prices below prior year levels.
Donald noted, “We have experienced a solid wave season,
with booking volumes up almost 20 percent globally surpassing last year’s
cumulative advance booking levels, albeit at lower prices. Many guests are
booking further in advance, which increases visibility and builds confidence
that yield comparisons will turn positive in the second half of 2014. Increased
interest across our brands is an encouraging indication that our message is
resonating as consumers recognize the strong value proposition and exceptional
vacation experiences we provide.”
The company continues to expect 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). The
company also continues to expect 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 $1.50 to $1.70, compared to 2013 non-GAAP diluted earnings of $1.58 per
share.
Looking forward, Donald stated, “We are on the path
toward improved financial performance. We are working hard to maintain the
momentum with additional product initiatives, continuous improvement in our
already high guest satisfaction levels and greater utilization of our global
scale.”
Second Quarter 2014
Outlook
Second
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 second
quarter are expected to be up 2.5 to 3.5 percent on a constant dollar basis
compared to the prior year due primarily to higher selling and administrative
costs.
Based on the above factors, the company
expects non-GAAP diluted earnings (loss) for the second quarter 2014 to be in
the range of $(0.02) to $0.02 per share versus 2013 non-GAAP earnings of $0.07
per share.
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