8-KOther Events

CARNIVAL CORP 8-K Report (Sep 20, 2002)

Filed September 20, 2002For Securities:CCL

Summary

Carnival Corporation's third quarter earnings report for the period ending August 31, 2002, indicates a slight increase in net income to $500.8 million ($0.85 Diluted EPS) from $495.0 million ($0.84 Diluted EPS) in the prior year's third quarter, on slightly lower revenues of $1.44 billion compared to $1.49 billion. The results benefited from a $34 million income tax benefit related to Costa Cruise operations and a new Italian investment tax law, partially offset by a $20 million vessel write-down and $13 million in earnings reduction due to canceled cruises. Despite a decrease in cruise revenues primarily driven by fewer guests purchasing air transportation and lower ticket prices, the company saw a less than 1% decline in net revenue yield, which was significantly better than their earlier forecast. This resilience is attributed to a strengthening euro and stronger-than-expected close-in bookings. The company anticipates sequential yield improvement to continue, projecting positive net revenue yield comparisons in the fourth quarter and ongoing fleet expansion with new vessel deliveries, demonstrating confidence in the long-term fundamentals of its business.

Key Highlights

  • 1Net income for Q3 2002 was $500.8 million ($0.85 Diluted EPS), a slight increase from $495.0 million ($0.84 Diluted EPS) in Q3 2001.
  • 2Revenues for Q3 2002 decreased to $1.44 billion from $1.49 billion in Q3 2001.
  • 3Third-quarter earnings included a $34 million income tax benefit from Costa Cruise operations due to a new Italian investment tax law.
  • 4A $20 million vessel write-down and $13 million due to canceled cruises impacted Q3 2002 earnings.
  • 5Net revenue yield for Q3 2002 declined by less than 1%, outperforming the company's forecast of a 3-5% decrease.
  • 6Carnival Corporation announced an agreement for a new Conquest-class vessel with a late fall 2005 delivery, signaling continued fleet expansion.
  • 7The company forecasts positive net revenue yield comparisons for the fourth quarter of 2002, projecting a 1-3% increase.

Frequently Asked Questions

For the third quarter ended August 31, 2002, Carnival Corporation reported a slight increase in net income to $500.8 million ($0.85 Diluted EPS) from $495.0 million ($0.84 Diluted EPS) in the same quarter of 2001. However, revenues saw a decrease to $1.44 billion from $1.49 billion year-over-year.

A significant positive factor was a $34 million income tax benefit from Carnival's Costa Cruise operation due to a new Italian investment tax law. On the negative side, earnings were impacted by a $20 million vessel write-down and a $13 million reduction due to canceled cruises during the quarter.

Carnival Corporation expects sequential yield improvement to continue, with net revenue yield comparisons turning positive in the fourth quarter of 2002. They forecast net revenue yields to increase by 1-3% in Q4, driven by expected higher occupancy levels, despite booking pricing being slightly below the prior year.

Yes, Carnival Corporation is demonstrating continued confidence in its long-term business fundamentals through fleet expansion. The company announced an agreement for a new Conquest-class vessel for delivery in late fall 2005 and highlighted that its strong cash flows and balance sheet enable continued fleet expansion even during uncertain times. Several new ships are also scheduled for delivery across its brands in late 2002.