01—Abstract
Summary
Summary of the 10-Q/A filed October 5, 2016. Cited figures are marked; the original filing is the authoritative source.
Carnival Corp. reported a solid third quarter for fiscal year 2016, demonstrating revenue growth driven by increased capacity and improved yields across its North America and EAA segments.
The company benefited from lower fuel prices, which helped to offset rising operating costs associated with capacity expansion and ship maintenance. Despite foreign currency headwinds impacting translation, the underlying operational performance remained strong. Looking ahead, Carnival Corp. provided updated earnings per share guidance for the full year 2016 and the fourth quarter, reflecting confidence in continued performance.
The company also detailed its significant capital expenditure plans, including new ship orders, underscoring its commitment to fleet modernization and expansion. Management highlighted robust liquidity and a strong balance sheet, positioning the company to fund its growth initiatives and return capital to shareholders through dividends and share repurchases.
02—Key points
Key Highlights
- Consolidated net cruise revenues increased by 4.4% to $4.1 billion for the three months ended August 31, 2016, compared to the prior year, driven by a 3.9% capacity increase and a 2.7% rise in constant currency net revenue yields.
- The North America segment showed strong performance with a 5.9% increase in cruise passenger ticket revenues and a 4.7% increase in onboard and other cruise revenues, supported by capacity growth and improved pricing.
- Fuel costs decreased significantly by 23% ($80 million) due to lower fuel prices, contributing to improved profitability.
- The company's full-year 2016 adjusted diluted earnings per share guidance was revised to be in the range of $3.33 to $3.37.
- Carnival Corp. outlined substantial future capital expenditure commitments, with approximately $1.0 billion for the remainder of 2016 and significant investments planned for new shipbuilding programs through 2022.
- Liquidity remained strong at $10.8 billion as of August 31, 2016, comprising cash, available credit facilities, and committed future financings, providing ample resources for operations and capital investments.
- Adjusted earnings per share for the three months ended August 31, 2016, increased to $1.92 from $1.75 in the prior year, reflecting operational improvements and the benefit of lower fuel costs.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2016, Carnival Corp kept $0.28.
- Revenue$5.10B100.0%
- Cost of revenue−$2.56B50.3%
- Gross profit$2.53B49.7%
- Operating costs−$972.0M19.1%
- Operating income$1.56B30.6%
- Interest, other & tax−$138.0M2.7%
- Net income$1.42B27.9%
04—Financials
Financial Highlights
Figures from 10-Q/AQ3 FY2016filed October 5, 2016Financial Statements
Q3 FY2016 against Q3 FY2015
| Line item | Q3 FY2016Q3 FY2015 | Change |
|---|---|---|
| Revenue | $5.10B$4.88B | +4.4% |
| Cost of Revenue | $2.56B$2.49B | +2.9% |
| Gross Profit | $2.53B$2.39B | +5.9% |
| SG&A Expenses | $529.00M$484.00M | +9.3% |
| Operating Expenses | $3.54B$3.37B | +4.8% |
| Operating Income | $1.56B$1.51B | +3.4% |
| Interest Expense | $61.00M$53.00M | +15.1% |
| Net Income | $1.42B$1.22B | +17.1% |
| EPS (Basic) | $1.93$1.56 | +23.7% |
| EPS (Diluted) | $1.93$1.56 | +23.7% |
| Shares Outstanding (Basic) | 737.00M778.00M | −5.3% |
| Shares Outstanding (Diluted) | 739.00M781.00M | −5.4% |
05—Questions
Frequently Asked Questions
What is the company's outlook for the remainder of fiscal year 2016?
Carnival Corp. expects adjusted diluted earnings per share for the 2016 fourth quarter to be in the range of $0.55 to $0.59 and for the full year 2016 to be between $3.33 and $3.37.
How did foreign currency fluctuations impact the company's results?
The company experienced a negative foreign currency translational impact of $62 million on revenues for the three months ended August 31, 2016, due to a stronger U.S. dollar against the euro, sterling, and Australian dollar. This also impacted net cruise revenues by $94 million for the same period.
What are the company's plans for future capacity growth and capital expenditures?
Carnival Corp. is committed to measured capacity growth and has ordered new ships, with significant capital expenditures planned. Total annual capital expenditures are expected to be approximately $1.0 billion for the remainder of 2016, with substantial investments projected for new shipbuilding programs through 2022, totaling over $20 billion in future commitments.
How is the company managing its liquidity and financing needs?
The company maintains strong liquidity, with $10.8 billion available as of August 31, 2016, from cash, credit facilities, and committed future financings. Carnival Corp. expects operating cash flows and its strong balance sheet to fund its capital projects, debt service, and working capital needs, with the ability to secure additional debt financing if necessary.
06—Continue