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UPDATE: Carnival Profit Surges, Lifts 2014 Earnings Outlook

June 24, 2014

PANAMA (Alliance News) - Cruise operator Carnival Corp. & PLC on Tuesday reported a profit for the second quarter that more than doubled from last year, reflecting higher revenues and lower fuel costs. Revenues for the quarter beat analysts' expectations.

Looking ahead, the company provided earnings guidance for the third quarter below Street view, but raised its earnings outlook for fiscal 2014.

Carnival noted that its earnings for the latest quarter were significantly better than anticipated in its March guidance due to better than expected net revenue yields for most of the company's cruise brands, as well as lower than expected net cruise costs.

The Miami, Florida-based company reported net income for the second quarter of USD106 million or USD0.14 per share, up from USD41 million or USD0.05 in the prior-year quarter.

The latest quarter's results include net gain on vessel transactions of USD15 million and net unrealized gains on fuel derivatives of USD11 million. The year-ago period's results include gain on a ship sale of USD15 million and unrealized losses on fuel derivatives of USD31 million.

Excluding items, adjusted net income for the latest quarter was USD80 million or USD0.10 per share, compared to USD57 million or USD0.07 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of USD0.02 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 4% to USD3.63 billion from USD3.48 billion in the same quarter last year, but topped analysts' consensus estimate of USD3.61 billion.

Revenues from cruise passenger ticket sales rose 3% from the same period last year to USD2.70 billion, while cruise on-board and other revenues grew 8% to USD905 million.

On a constant dollar basis, net revenue yields or net revenue per available lower berth day or ALBD, decreased 2.2% for the quarter, but was better than the company's guidance for a decline of 3 to 4%.

Meanwhile, net cruise costs excluding fuel per ALBD increased 1.2% in constant dollars, primarily due to higher dry-dock costs, as well as advertising and promotion expenses.

The company's operating costs and expenses for the quarter increased 5% to USD3.48 billion from USD3.33 billion in the year-ago quarter. However, fuel prices decreased 4% from the prior-year period to USD657 per metric ton and the company recorded a 6% improvement in fuel consumption.

Looking ahead to the third quarter, Carnival forecast adjusted earnings in a range of USD1.38 to USD1.44 per share, compared to adjusted earnings of USD1.38 per share in the prior-year period. Analysts expect the company to report earnings of USD1.51 per share for the quarter.

For fiscal 2014, Carnival raised its outlook for adjusted earnings to a range of USD1.60 to USD1.75 per share, from the prior range of USD1.50 to USD1.70 per share. Street is currently looking for full-year 2014 earnings of USD1.72 per share.

The company projects full-year revenues to be higher compared to the prior year and continues to expect net revenue yields on a constant dollar basis to be down slightly compared to the prior year, or flat to up slightly on a current dollar basis.

Carnival noted that since March, its fleetwide booking volumes for the next three quarters were running slightly behind last year at higher prices. Meanwhile, cumulative advance bookings for the remainder of 2014 are currently slightly ahead of the prior year at higher prices.

In Tuesday's regular trading session, CCL is currently trading at USD38.50, down USD0.91 or 2.31% on a volume of 1.87 million shares.

CCL.L is currently trading on the London Stock Exchange at 2,281 pence, down 32 pence or 1.38% on a volume of 1.01 million shares.

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Source: Alliance News

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