01—Abstract
Summary
Summary of the 10-Q filed March 30, 2017. Cited figures are marked; the original filing is the authoritative source.
Carnival Corporation & plc reported strong top-line growth for the three months ended February 28, 2017, with total revenues increasing by 3.8% year-over-year to $3.79 billiona.
This growth was primarily driven by a 3.2% increase in passenger ticket revenues and a 6.0% rise in onboard and other revenues. The company also saw a significant improvement in net income, which more than doubled to $352 millionb from $142 million in the prior year period. This was aided by a substantial positive swing in gains from fuel derivatives, which moved from a large loss to a net gain.
Despite the revenue and net income increases, operating income saw a slight decrease due to higher operating costs, particularly fuel expenses which nearly doubled compared to the prior year. However, the company's cash flow from operations remained robust, increasing by 17% to $932 millionc, largely driven by higher customer deposits, indicating strong future booking activity. Carnival also reaffirmed its full-year earnings per share guidance, signaling confidence in its ongoing performance.
02—Key points
Key Highlights
- Total revenues increased by 3.8% to $3.79 billion for the three months ended February 28, 2017.
- Net income more than doubled to $352 million, compared to $142 million in the prior year period.
- Diluted earnings per share (EPS) rose to $0.48 from $0.18.
- Operating costs increased by 8.6% to $2.44 billion, primarily due to higher fuel costs.
- Fuel prices per metric ton nearly doubled to $362 in the current period compared to $229 in the prior year.
- Cash flow from operating activities increased by 17% to $932 million.
- The company reaffirmed its 2017 full-year adjusted diluted EPS guidance of $3.50 to $3.70.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2017, Carnival Corp kept $0.09.
- Revenue$3.79B100.0%
- Cost of revenue−$2.44B64.2%
- Gross profit$1.36B35.8%
- Operating costs−$988.0M26.1%
- Operating income$368.0M9.7%
- Interest, other & tax−$16.0M0.4%
- Net income$352.0M9.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2017filed March 30, 2017Financial Statements
Q1 FY2017 against Q1 FY2016
| Line item | Q1 FY2017Q1 FY2016 | Change |
|---|---|---|
| Revenue | $3.79B$3.65B | +3.8% |
| Cost of Revenue | $2.44B$2.24B | +8.6% |
| Gross Profit | $1.36B$1.41B | −3.7% |
| SG&A Expenses | $549.00M$551.00M | −0.4% |
| Operating Expenses | $3.42B$3.22B | +6.4% |
| Operating Income | $368.00M$434.00M | −15.2% |
| Interest Expense | $51.00M$52.00M | −1.9% |
| Net Income | $352.00M$142.00M | +147.9% |
| EPS (Basic) | $0.48$0.18 | +166.7% |
| EPS (Diluted) | $0.48$0.18 | +166.7% |
| Shares Outstanding (Basic) | 725.00M766.00M | −5.4% |
| Shares Outstanding (Diluted) | 728.00M769.00M | −5.3% |
05—Questions
Frequently Asked Questions
How did Carnival's revenue perform in the first quarter of fiscal year 2017?
Carnival Corporation & plc reported a 3.8% increase in total revenues, reaching $3.79 billion for the three months ended February 28, 2017. This growth was driven by higher passenger ticket revenues and a significant increase in onboard and other revenue spending by guests.
What was the primary driver for the significant increase in net income?
The net income more than doubled to $352 million primarily due to a substantial swing in the gains on fuel derivatives, moving from a large loss of $236 million in the prior year period to a net gain of $27 million in the current period. Additionally, strong revenue growth contributed to the improved profitability.
How did operating costs change, and what was the impact of fuel prices?
Operating costs and expenses increased by 8.6% to $2.44 billion. The most significant factor was the substantial increase in fuel costs, which rose due to higher fuel prices per metric ton, nearly doubling from $229 to $362 year-over-year.
What is the company's outlook for the rest of the fiscal year 2017?
Carnival reaffirmed its previously issued guidance for the full fiscal year 2017, expecting adjusted diluted earnings per share to be in the range of $3.50 to $3.70. This outlook reflects confidence in continued performance despite rising operating costs, particularly fuel.
06—Continue