10-QPeriod: Q1 FY2004

CARNIVAL CORP Quarterly Report for Q1 Ended Feb 29, 2004

Filed April 8, 2004For Securities:CCL

Summary

Carnival Corporation & plc reported strong financial performance for the first quarter of fiscal year 2004, with net income more than doubling to $203 million ($0.25 per share) from $127 million ($0.22 per share) in the prior year. This significant growth was driven by the full consolidation of the former P&O Princess operations, which substantially increased revenues and capacity compared to the prior year's reported results. Revenues surged to $1.98 billion, up from $1.035 billion in the same period last year. The company's liquidity remains robust, supported by strong operating cash flow of $542 million. Significant capital expenditures of $1.36 billion were directed towards new shipbuilding, including final payments for several new vessels. Carnival Corporation & plc provided a positive outlook for the remainder of fiscal year 2004, projecting earnings per share between $2.05 and $2.15, reflecting expected increases in net revenue yields and controlled net cruise costs per ALBD.

Key Highlights

  • 1Net income for the quarter more than doubled to $203 million from $127 million in the prior year.
  • 2Earnings per share increased to $0.25 from $0.22, driven by higher revenues and the full consolidation of P&O Princess.
  • 3Total revenues saw a substantial increase, reaching $1.98 billion compared to $1.035 billion in the prior year, largely due to the expanded fleet and operations.
  • 4Operating cash flow remained strong at $542 million, indicating healthy operational performance and cash generation.
  • 5Significant capital expenditures of $1.36 billion were made, primarily for the ongoing new shipbuilding program.
  • 6The company anticipates full-year 2004 earnings per share to be in the range of $2.05 to $2.15, signaling continued positive momentum.
  • 7Net revenue yields increased by 4.1% (4.7% gross) compared to pro forma 2003, benefiting from a weaker U.S. dollar and increased capacity.

Frequently Asked Questions

The substantial increase in net income and revenue is primarily driven by the full consolidation of the former P&O Princess operations, which were acquired in the previous year. This expansion has significantly increased Carnival Corporation & plc's overall capacity and operational scale, leading to higher passenger ticket sales and onboard revenues compared to the prior year's reported results.

Carnival Corporation & plc invested $1.36 billion in capital projects during the quarter, with the majority allocated to its ongoing new shipbuilding program, including final payments for new vessels like the Queen Mary 2, Carnival Miracle, and Diamond Princess. The company believes its current liquidity and operating cash flow are sufficient to fund these commitments, along with debt service and dividend payments.

The company has provided a positive outlook for the full fiscal year 2004, projecting earnings per share to be in the range of $2.05 to $2.15. This forecast is based on anticipated growth in net revenue yields and effective management of net cruise costs per ALBD, supported by increased fleet capacity and the continued integration of its expanded operations.

The company disclosed ongoing litigation, including class action lawsuits related to facsimile advertisements and investigations into alleged improper bilge water discharge by Holland America Line. Additionally, there is arbitration regarding a ship conversion contract. While the company believes it has defenses and is contesting these matters, their ultimate outcomes cannot be determined at this time. However, the company generally does not expect a material adverse effect on its financial statements from these contingencies.