10-QPeriod: Q1 FY2018

CARNIVAL CORP Quarterly Report for Q1 Ended Feb 28, 2018

Filed March 22, 2018For Securities:CCL

Summary

Carnival Corporation & plc reported strong financial results for the three months ended February 28, 2018, showcasing a significant increase in both revenues and net income compared to the prior year. Total revenues grew by 12%, driven by a robust performance in passenger ticket sales and onboard spending, supported by a 2.2% increase in capacity (Available Lower Berth Days). Net income rose by approximately 11% to $391 million, translating to diluted earnings per share of $0.54, up from $0.48 in the comparable period of 2017. This performance indicates healthy demand for its cruise offerings and effective operational management. Operationally, the company saw growth across its segments, particularly in Europe and Asia (EA), which experienced a substantial increase in operating income. While costs also rose, driven by higher fuel prices and capacity expansion, the revenue growth outpaced these increases, leading to improved profitability. The company also demonstrated strong cash flow generation from operations, which was utilized for capital expenditures, debt repayments, and returning value to shareholders through dividends and share repurchases, highlighting a balanced approach to growth and capital allocation.

Financial Highlights

51 data points
Beta

Revenue

$4.23B

36.0% Gross Margin

Net Income

$391.00M

9.2% Net Margin

EPS (Diluted)

$0.54

Total Assets

$41.44B

Cash & Equivalents

$482.00M

Free Cash Flow

$490.00M

Financial Statements
Beta
Revenue$4.23B
Cost of Revenue$2.71B
Gross Profit$1.52B
SG&A Expenses$616.00M
Operating Expenses$3.81B
Operating Income$419.00M
Interest Expense$48.00M
Net Income$391.00M
EPS (Basic)$0.54
EPS (Diluted)$0.54
Shares Outstanding (Basic)717.00M
Shares Outstanding (Diluted)719.00M

Key Highlights

  • 1Revenue increased by 12% to $4.2 billion for the three months ended February 28, 2018, compared to $3.8 billion in the prior year.
  • 2Net income grew by 11% to $391 million ($0.54 diluted EPS) from $352 million ($0.48 diluted EPS) in the same period last year.
  • 3Capacity, measured by Available Lower Berth Days (ALBDs), increased by 2.2%.
  • 4Onboard and other cruise revenues grew by 9.5% to $1.1 billion.
  • 5Operating income increased by 14% to $419 million, with the EA segment showing a significant 97% increase in operating income.
  • 6Net cash provided by operating activities increased by 14% to $1.1 billion.
  • 7The company paid a dividend of $0.45 per share, an increase from $0.35 per share in the prior year.

Frequently Asked Questions

Revenue growth was primarily driven by a 12% increase in cruise passenger ticket revenues and a 9.5% increase in onboard and other revenues. This was supported by a 2.2% capacity increase and price improvements across various cruise programs.

Operating costs and expenses increased by 11%, largely due to a 2.2% capacity increase, higher fuel prices, and foreign currency impacts. While costs rose, revenue growth outpaced cost increases, leading to improved operating income.

Carnival Corporation & plc is focused on profitable growth while maintaining a strong balance sheet. They fund capital investments through operating cash flow and plan to return free cash flow to shareholders via dividends and share repurchases. The company also increased its dividend payment to $0.45 per share in this period.

The company manages foreign currency risks through its operations and the use of derivative instruments. They specifically hedge certain ship commitments and net investments in foreign operations. The weaker U.S. dollar against functional currencies positively impacted reported revenues in this period.