Carnival buoyed by first-quarter and hoists earnings guidance
LONDON (ShareCast) - Buoyed by strong first-quarter results, dual-listed cruise ship operator Carnival (LSE: CCL.L - news) has set off full steam ahead in 2015, hoisting its guidance for full year earnings. The FTSE 100 and S&P 500 company drove net revenue yields 2.0% higher in the three month period ending on 28 February.
Having lost $20m loss in the same period last year, this time Carnival swung back into deep black with a profit of $49m on sales down 1.5% to $3.53bn.
Adjusted earnings of 20 cents per share were well ahead of consensus expectations of 9 cents a share, though sales forecasts were for a slightly stronger $3.57bn.
For the full-year, Carnival, which runs the Cunard, P&O and Princess cruise lines, now says it expects yields to rise 3-4% in constant currencies, 1% higher than its previous guidance in December.
It boasted that advance bookings for the remainder of 2015 were steaming ahead of the prior year and at higher prices.
But it cautioned that unfavorable changes in currency exchange rates were likely to reduce 2015 earnings by $0.28 per share compared to December's guidance.
Therefore, the company now forecasts full-year 2015 diluted earnings per share to be in the range of $2.30 to $2.50, up at least 19.2% compared to 2014.
President and chief executive officer Arnold Donald said the year was off to a strong start, buoyed by on-board revenue initiatives that drove the particularly strong improvement in first quarter yields.
"We are experiencing an ongoing improvement in underlying fundamentals based on our successful initiatives to drive demand. Our efforts to further elevate our guest experience are clearly resonating with consumers and, notably, improving the frequency and retention of our loyal guests." He acknowleged that, like many global companies, the strengthening of the US dollar had hampered full year earnings expectations, masking a 3-4% increase in yields that it was expecting.
Nevertheless he said management initiatives to drive ticket and on-board revenue yields have improved financial performance and the company remains on track toward its goal of achieving double-digit return on invested capital in the next three to four years.