8-KOther Events

CARNIVAL CORP 8-K Report (Dec 19, 2002)

Filed December 19, 2002For Securities:CCL

Summary

Carnival Corporation has reported strong financial results for the fourth quarter and the full fiscal year ended November 30, 2002. The company achieved record full-year earnings per share of $1.73, a significant increase from $1.58 in the prior year. This growth demonstrates the company's resilience and ability to navigate a challenging global environment, particularly in the wake of the September 11th events. Fourth-quarter performance was notably robust, with net income rising to $191.3 million ($0.33 Diluted EPS) on revenues of $1.04 billion, compared to $116.3 million ($0.20 Diluted EPS) on revenues of $959.1 million in the same period of 2001. This improvement was driven by an increase in cruise capacity and higher net revenue yields, partially offset by increased fuel costs. The company also provided a cautiously optimistic outlook for fiscal year 2003. While advance bookings and pricing are slightly up year-over-year, booking levels have recently moderated, partly due to negative media attention regarding stomach flu outbreaks on cruise ships. Management expects continued revenue yield growth but also anticipates higher operating costs, primarily driven by increased fuel prices and significant marketing expenses for new ship launches and brand campaigns. Additionally, Carnival is progressing with its proposed dual listed company (DLC) structure with P&O Princess, a significant strategic move that, if approved, is expected to close in early to mid-2003.

Key Highlights

  • 1Record full-year diluted Earnings Per Share (EPS) of $1.73, up from $1.58 in the prior year.
  • 2Fourth-quarter net income surged to $191.3 million ($0.33 EPS) from $116.3 million ($0.20 EPS) in Q4 2001.
  • 3Fourth-quarter revenues increased by 8.0% year-over-year, driven by a 7.9% increase in cruise capacity and improved net revenue yield.
  • 4Net revenue yield for Q4 2002 increased by 2.6% compared to Q4 2001.
  • 5Company experienced a $17 million income tax benefit in Q4 2002 from its Costa Cruises operation due to a new Italian investment incentive law.
  • 6Carnival Corporation is moving forward with its proposed Dual Listed Company (DLC) structure with P&O Princess, with an expected closing in late Q1 or early Q2 2003, subject to approvals.
  • 7Outlook for Q1 2003 anticipates net revenue yield to be up 1-3% and operating costs per available berth day to increase 4-6% due to higher fuel and marketing costs.

Frequently Asked Questions

For the fourth quarter ended November 30, 2002, Carnival reported net income of $191.3 million ($0.33 Diluted EPS) on revenues of $1.04 billion. For the full fiscal year 2002, the company achieved net income of $1.02 billion ($1.73 Diluted EPS) on revenues of $4.37 billion, marking a record year for EPS.

The growth was primarily driven by an increase in cruise capacity (7.9% in Q4 2002) and an improvement in net revenue yield (2.6% in Q4 2002). The company also benefited from a $17 million income tax benefit related to its Costa Cruises operation.

Carnival anticipates a slight increase in advance booking occupancy and pricing for fiscal 2003 compared to the previous year. However, they also expect higher operating costs due to significantly increased fuel prices and marketing expenses. Booking trends have recently slowed, potentially due to negative media coverage of cruise ship health issues.

The Federal Trade Commission cleared the proposed combination on October 4, 2002. Carnival and P&O Princess are in talks regarding a dual listed company (DLC) structure. The transaction is pre-conditional and, if approved by P&O Princess's board by January 10, 2003, would be subject to shareholder approvals and is expected to close in late Q1 or early Q2 2003.