8-KOther Events

CARNIVAL CORP 8-K Report (Mar 21, 2003)

Filed March 21, 2003For Securities:CCL

Summary

Carnival Corporation reported its first quarter 2003 earnings on March 21, 2003. The company announced net income of $126.9 million, or $0.22 per diluted share, on revenues of $1.03 billion. This represents a slight decrease in net income compared to the same quarter in 2002, which saw $129.6 million in net income, though earnings per share remained flat. The quarter's results were impacted by external factors including concerns surrounding a potential war with Iraq, a challenging global economic climate, and historically high fuel costs. Despite these headwinds, Carnival highlighted the resilience of its business and the successful launch of the new Vista-class ship, Zuiderdam, by Holland America Line. Looking ahead, the company anticipates that the factors affecting the first quarter will continue to impact the second quarter, leading to reduced net revenue yields. However, Carnival remains optimistic about the long-term growth drivers of the cruise industry and is progressing towards its proposed combination with P&O Princess Cruises, which is expected to close in April 2003, subject to shareholder approval.

Key Highlights

  • 1First quarter 2003 net income was $126.9 million ($0.22 EPS) on revenues of $1.03 billion.
  • 2Revenues increased by 14% year-over-year, driven by a 14.7% increase in capacity.
  • 3Net revenue yields were flat year-over-year, but up 2% excluding the impact of increased capacity in lower-priced segments.
  • 4Cruise costs per available lower berth day rose 6.3%, primarily due to higher fuel costs (60% of the increase), advertising, insurance, environmental, and security expenses.
  • 5External factors such as concerns about the Iraq war, global economic uncertainty, and high fuel costs significantly impacted Q1 2003 results.
  • 6Holland America Line launched the new Vista-class ship, Zuiderdam, in Q1 2003.
  • 7The proposed combination with P&O Princess Cruises is progressing, with shareholder meetings scheduled for April 14-16, 2003, and expected closing shortly thereafter.

Frequently Asked Questions

Carnival Corporation reported net income of $126.9 million ($0.22 diluted EPS) on revenues of $1.03 billion for the first quarter ended February 28, 2003. This was compared to net income of $129.6 million ($0.22 diluted EPS) on revenues of $906.5 million for the same quarter in 2002.

The company's first quarter results were negatively impacted by concerns over a war with Iraq, a generally uncertain worldwide economy, and historically high fuel costs. These factors created a challenging environment for leisure travel.

Carnival anticipates that the challenging factors from the first quarter will continue to affect the second quarter. Bookings slowed due to war concerns, leading to a closer booking curve and reduced cruise prices. Net revenue yields are expected to be lower than the prior year, and cruise costs per available lower berth day are projected to increase by 10-12%.

Carnival Corporation is nearing the completion of its proposed combination with P&O Princess Cruises. Shareholder meetings to approve the transaction are scheduled for April 14 and April 16, 2003, with an expected closing shortly thereafter. If the transaction closes in April, P&O Princess' operations would be consolidated into Carnival's results starting from the second quarter of 2003.