10-QPeriod: Q3 FY2016

CARNIVAL CORP Quarterly Report for Q3 Ended Aug 31, 2016

Filed September 30, 2016For Securities:CCL

Summary

Carnival Corporation & plc reported strong financial results for the nine months ended August 31, 2016, with net income increasing significantly to $2,171 million from $1,487 million in the prior year period. This growth was driven by a 3.2% increase in capacity (ALBDs) and a notable decrease in fuel costs. Revenue also saw a healthy increase, with cruise passenger ticket revenues rising 3.7% and onboard and other revenues up 4.4% year-over-year. Despite a decrease in cash and cash equivalents from $1,395 million to $462 million over the nine-month period, the company maintained a strong liquidity position. Investing activities showed substantial capital expenditures, primarily for new shipbuilding and ship improvements. Financing activities involved debt repayments and issuances, dividend payments, and significant share repurchases, indicating a focus on returning capital to shareholders while managing its debt structure. Overall, the company demonstrated robust operational performance and a solid financial foundation.

Financial Highlights

51 data points
Beta

Revenue

$5.10B

49.7% Gross Margin

Net Income

$1.42B

27.9% Net Margin

EPS (Diluted)

$1.93

Total Assets

$39.33B

Cash & Equivalents

$462.00M

Free Cash Flow

$979.00M

Financial Statements
Beta
Revenue$5.10B
Cost of Revenue$2.56B
Gross Profit$2.53B
SG&A Expenses$529.00M
Operating Expenses$3.54B
Operating Income$1.56B
Interest Expense$61.00M
Net Income$1.42B
EPS (Basic)$1.93
EPS (Diluted)$1.93
Shares Outstanding (Basic)737.00M
Shares Outstanding (Diluted)739.00M

Key Highlights

  • 1Net income increased by 46% to $2,171 million for the nine months ended August 31, 2016, compared to $1,487 million in the same period last year.
  • 2Total revenues grew by 3.9% to $12.3 billion for the nine months ended August 31, 2016.
  • 3Fuel costs decreased by 35% to $648 million for the nine months ended August 31, 2016, driven by lower fuel prices.
  • 4Capacity, measured in Available Lower Berth Days (ALBDs), increased by 3.2% for the nine months ended August 31, 2016.
  • 5The company invested heavily in its fleet, with capital expenditures of $2.6 billion for the nine months ended August 31, 2016, including new shipbuilding and ship improvements.
  • 6Shareholders benefited from dividends paid ($721 million) and significant share repurchases ($2.1 billion of Carnival Corporation common stock) during the nine months ended August 31, 2016.
  • 7The company maintained a strong liquidity position with $10.8 billion available as of August 31, 2016, including cash, revolving credit facilities, and committed future financings.

Frequently Asked Questions

Carnival Corporation's total revenues increased by 3.9% to $12.3 billion for the nine months ended August 31, 2016, compared to $11.8 billion in the same period of 2015. This growth was primarily driven by a 3.2% increase in capacity (ALBDs) and higher onboard and other cruise revenues.

Fuel costs significantly decreased by 35% to $648 million for the nine months ended August 31, 2016, down from $996 million in the prior year. This reduction, largely due to lower fuel prices, contributed positively to the company's profitability and net income growth.

Carnival Corporation maintained a strong liquidity position with $10.8 billion available as of August 31, 2016. The company used cash from operations to fund investing activities, primarily for fleet expansion and improvements. Financing activities included repaying and issuing debt, paying dividends, and undertaking substantial share repurchases, indicating a strategy to balance debt management with returning value to shareholders.

Carnival Corporation expects year-over-year capacity increases, with approximately 3.6% for the full year 2016 and projected increases ranging from 2.6% in 2017 to 8.0% in 2020, driven by new ship deliveries. These projections are subject to various factors and may be revised.