Carnival reported earnings that were slightly better than analysts' estimates despite higher fuel costs.
Thanks to better-than-expected bookings, Carnival also bumped up earnings expectations for the third quarter.
The Arnold Donald-led cruise giant reported second-quarter net income of $378m, which was better than the $370m reported in the year earlier quarter. The company reported earnings per share of $0.52, which came in slightly better than the mean estimate of $0.47 from analyst polls.
Fuel hedges stripped out
The annual result strips out unrealised gains in Carnival’s fuel hedges, which added some $235m to results last year.
The New York-listed company was able to increase its revenue per available berth 5% over last year. Cruise costs increased 1.5%, which was in-line with its March guidance ranging between 1.5% to 2.5%.
It said that changes in fuel prices (including realized fuel derivatives) and currency exchange rates decreased earnings by $0.12 per share.
Donald said of the results noted, "Strong execution drove significant operational improvements, which more than offset the substantial drag from fuel and currency, leading to another second quarter adjusted earnings record.”
He added that “cumulative bookings for the next three quarters are higher at prices that are well ahead of the prior year. During the quarter, booking volumes for the next three quarters have been running in line with last year, also at prices that are well ahead.”
Based on the better bookings, Carnival expects earnings per share for the third quarter 2017 to be in the range of $2.16 to $2.20, compared to analysts’ estimates of $2.14 per share. It expects full year 2017 earnings per share to be in the range of $3.60 to $3.70, compared to March guidance of $3.50 to $3.70.
