01—Abstract
Summary
Summary of the 10-Q filed July 1, 2010. Cited figures are marked; the original filing is the authoritative source.
Carnival Corporation & PLC reported revenues of $3.2 billiona for the three months ended May 31, 2010, a 8.4% increase compared to the same period in 2009, driven by higher passenger ticket and onboard revenues.
Net income for the quarter was $252 millionb, a slight decrease from $264 million in the prior year, resulting in diluted earnings per share of $0.32, down from $0.34. Despite an 8.1% increase in capacity (ALBDs), the company faced increased operating costs, particularly a significant rise in fuel prices, which impacted profitability. The company also experienced disruptions from the Icelandic volcanic ash cloud and an earthquake in Chile.
For the six-month period, revenues increased to $6.3 billionc from $5.8 billion, but net income fell to $427 million from $524 million, with diluted EPS at $0.54 compared to $0.66 in the prior year. Carnival's balance sheet shows total assets of $36.0 billion and total shareholders' equity of $20.9 billion as of May 31, 2010. Current liabilities increased significantly due to a substantial rise in customer deposits, reflecting advance ticket sales.
The company's cash flow from operations remained strong, providing $1.8 billiond for the six months ended May 31, 2010, which was used to fund significant capital expenditures, primarily for new shipbuilding. The company maintained a strong liquidity position, with $5.5 billion in cash, cash equivalents, and available borrowing capacity.
02—Key points
Key Highlights
- Total revenues increased to $3.20 billion for the three months ended May 31, 2010, up from $2.95 billion in the prior year, driven by higher cruise ticket and onboard revenues.
- Net income for the three months ended May 31, 2010, was $252 million, a decrease from $264 million in the comparable period of 2009.
- Diluted Earnings Per Share (EPS) for the quarter was $0.32, down from $0.34 in the prior year, reflecting increased costs.
- Operating costs increased significantly, driven by an 8.1% capacity increase and a substantial rise in fuel prices, which more than doubled per metric ton.
- Customer deposits increased substantially to $3.21 billion from $2.58 billion, indicating strong advance bookings.
- Capital expenditures were robust at $2.17 billion for the six months ended May 31, 2010, primarily for new shipbuilding.
- The company maintained a strong liquidity position with $5.5 billion in cash, cash equivalents, and committed financings as of May 31, 2010.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2010, Carnival Corp kept $0.08.
- Revenue$3.19B100.0%
- Cost of revenue−$2.17B67.8%
- Gross profit$1.03B32.2%
- Operating costs−$681.0M21.3%
- Operating income$349.0M10.9%
- Interest, other & tax−$97.0M3.0%
- Net income$252.0M7.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2010filed July 1, 2010Financial Statements
Q2 FY2010 against Q2 FY2009
| Line item | Q2 FY2010Q2 FY2009 | Change |
|---|---|---|
| Revenue | $3.19B$2.95B | +8.4% |
| Cost of Revenue | $2.17B$1.89B | +14.9% |
| Gross Profit | $1.03B$1.06B | −3.1% |
| SG&A Expenses | $404.00M$393.00M | +2.8% |
| Operating Expenses | $2.92B$2.60B | +12.4% |
| Operating Income | $349.00M$353.00M | −1.1% |
| Interest Expense | $99.00M$90.00M | +10.0% |
| Net Income | $252.00M$264.00M | −4.5% |
| EPS (Basic) | $0.32$0.34 | −5.9% |
| EPS (Diluted) | $0.32$0.33 | −3.0% |
| Shares Outstanding (Basic) | 788.00M— | — |
| Shares Outstanding (Diluted) | 806.00M— | — |
05—Questions
Frequently Asked Questions
What was Carnival's revenue and profitability performance for the quarter?
For the three months ended May 31, 2010, Carnival reported revenues of $3.195 billion, an increase of 8.4% from $2.948 billion in the prior year. Net income was $252 million, a slight decrease from $264 million in the same period last year. Diluted EPS was $0.32, down from $0.34.
What factors contributed to the change in operating costs?
Operating costs increased due to an 8.1% increase in capacity (ALBDs) and a significant rise in fuel prices, which jumped from $304 per metric ton in the prior year's quarter to $498 per metric ton in the current quarter. These factors, along with other operating expenses, led to a higher overall cost structure.
How is Carnival's balance sheet positioned, particularly regarding liabilities?
As of May 31, 2010, Carnival's total assets were $36.0 billion, with shareholders' equity at $20.9 billion. Total current liabilities saw a notable increase to $6.76 billion from $4.97 billion in the prior year, largely driven by a substantial rise in customer deposits to $3.21 billion, reflecting strong advance ticket sales. Long-term debt also remained significant.
What is the company's outlook and financial flexibility?
The company expects to fund its capital projects, debt service, and other commitments through operating cash flow and existing liquidity. As of May 31, 2010, Carnival reported liquidity of $5.5 billion, comprising cash, cash equivalents, and available borrowing capacity, indicating a strong financial position to manage its obligations and investments.
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