Carnival Corp has seen less profit amid greater expenses — but still beat Wall Street consensus for the second quarter.
The world's largest cruise company posted a $451m net profit for the three-month period, down from a $561m net profit a year earlier.
Its adjusted earnings came in at $457m versus $489m during the same period last year. That still produced $0.66 earnings per share (EPS) that beat analysts' estimates of $0.61 but was below $0.66 EPS a year ago.
Total revenue reached $4.8bn, up from $4.4bn during the same quarter in 2018. On a constant currency basis, revenue rose from $3.2bn to $3.6bn.
"Second-quarter earnings included revenue growth from higher capacity and improved onboard spending, more than offset by a drag from fuel and currency compared to the prior year," Carnival chief executive Arnold Donald said.
"Second quarter adjusted earnings were better than March guidance by $0.08 per share substantially due to the timing of expenses between quarters."
The Cuba effect
Carnival's advanced bookings are ahead of last year's pace but the company still expects the US ban on cruises to Cuba to lower 2019 EPS by $0.04 to $0.06.
"While the company was able to quickly adjust its itineraries to provide guests with attractive alternative vacation experiences, the suddenness of the regulatory change to this high yielding destination has led to a near-term impact on revenue yields," Carnival said.
Carnival's share price fell 7.7% to $48.60 last Thursday, the day of the results, in response to the impact.
Voyage disruptions related to the 134,000-gt Carnival Vista (built 2016) are also expected to hurt EPS by $0.08 to $0.10.
Carnival has also lowered its 2019 revenue guidance by 50 basis points due to lower ticket prices forecast in the second half of the year, mostly due to its continental European brands facing ongoing headwinds.
The company expects full year 2019 adjusted EPS in the range of $4.25 to $4.35, compared to March guidance of $4.35 to $4.55 and 2018 adjusted EPS of $4.26.
"This year our growth has been hampered by a confluence of events, which we are focused on mitigating," Donald said.
"Generating over $5bn of cash flow and with a robust business model, our business is strong and we remain confident over time we will deliver double-digit earnings growth and growth in return on invested capital."
