01—Abstract
Summary
Summary of the 10-Q filed March 30, 2012. Cited figures are marked; the original filing is the authoritative source.
Carnival Corporation & plc reported a net loss of $139 milliona for the three months ended February 29, 2012, a significant shift from a net income of $152 million in the prior year period.
This downturn was heavily influenced by a $173 millionb goodwill and trademark impairment charge related to its Ibero Cruises brand, along with $34 million in impairment for the Costa Allegra and $29 million in incident-related expenses for the Costa Concordia, none of which were fully offset by insurance. Despite the net loss, consolidated revenues saw a modest increase of 4.2% to $3.58 billion, driven by higher passenger ticket and onboard spending, coupled with a 3.7% capacity increase. However, operating costs and expenses surged by 12.5% due to rising fuel prices ($137 million increase) and the aforementioned charges.
The company is navigating the aftermath of the Costa Concordia incident, which has impacted booking volumes and pricing, particularly for its European brands, although management believes the long-term impact will not be significant. The company maintains a strong liquidity position with $6.6 billionc in available liquidity.
02—Key points
Key Highlights
- Reported a net loss of $139 million for the quarter, compared to a net income of $152 million in the prior year.
- Consolidated revenues increased by 4.2% to $3.58 billion, driven by a 3.7% capacity increase and higher ticket and onboard spending.
- Operating costs and expenses rose significantly by 12.5% to $3.66 billion, largely due to a $173 million goodwill and trademark impairment for Ibero Cruises, higher fuel costs ($137 million increase), and other incident-related charges.
- The Costa Concordia incident negatively impacted fleetwide booking volumes and pricing, especially for European brands, although the company expects no significant long-term impact.
- Maintained a strong liquidity position with $6.6 billion in cash and available borrowing capacity as of February 29, 2012.
- Dividends declared per share remained stable at $0.25 for the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2012filed March 30, 2012Financial Statements
Q1 FY2012 against Q1 FY2011
| Line item | Q1 FY2012Q1 FY2011 | Change |
|---|---|---|
| Cost of Revenue | $2.69B$2.40B | +12.5% |
| SG&A Expenses | $421.00M$422.00M | −0.2% |
| Operating Expenses | $3.66B$3.18B | +15.1% |
| Operating Income | -$82.00M$235.00M | −134.9% |
| Interest Expense | $88.00M$86.00M | +2.3% |
| Net Income | -$139.00M$152.00M | −191.4% |
| EPS (Basic) | $-0.18$0.19 | −194.7% |
| EPS (Diluted) | $-0.18$0.19 | −194.7% |
| Shares Outstanding (Basic) | 778.00M790.00M | −1.5% |
| Shares Outstanding (Diluted) | 778.00M794.00M | −2.0% |
05—Questions
Frequently Asked Questions
What caused the significant drop in net income compared to the previous year?
The primary driver for the net loss of $139 million in the current quarter, compared to a net income of $152 million in the prior year, was a substantial $173 million goodwill and trademark impairment charge related to the Ibero Cruises brand. Additionally, the company incurred impairment charges for the Costa Allegra and recognized expenses related to the Costa Concordia incident that were not fully covered by insurance.
How has the Costa Concordia incident affected the company's financial performance and outlook?
The Costa Concordia accident has negatively impacted fleetwide booking volumes and pricing, particularly for the European brands, leading to a decline in bookings and lower prices compared to the prior year. While the company incurred direct costs and impairments related to the incident, management believes that the accident will not have a significant long-term impact on the business. The company also carries insurance for certain third-party claims.
What is the company's liquidity position and ability to meet its financial obligations?
Carnival Corporation & plc reported strong liquidity with $6.6 billion available as of February 29, 2012, comprising cash and cash equivalents, available under revolving credit facilities, and committed ship financings. The company believes its existing liquidity and projected cash flow from operations will be sufficient to fund its capital projects, debt service, working capital needs, and dividends over the next several years.
How did fuel prices impact the company's results?
Higher fuel prices significantly impacted operating costs, increasing by $137 million compared to the prior year period. This contributed to the overall rise in operating expenses and a wider net loss.
06—Continue