Carnival Shares Rise as Results Top Expectations

By Tess Stynes 

Carnival Corp. said its earnings soared in its latest quarter as the cruise-ship company benefited from lower costs and better-than-expected revenue.

Shares rose 5% to $45.82 in recent trading as per-share earnings, excluding certain one-time items, topped expectations.

"This is shaping up to be another strong year," Chief Executive Arnold Donald said in prepared remarks Tuesday touting its recent dividend increase and the board's approval on Monday of the repurchase of an additional $1 billion shares of the company's stock.

Shares of Carnival Corp. have declined 7.6%, along with the broader travel sector, since Britain's vote to leave the European Union last week.

Carnival did project earnings for the current quarter below analysts' expectations. The company forecast per-share earnings of $1.83 to $1.87, while analysts polled by Thomson Reuters expected per-share profit of $1.98.

Carnival, which is dual-listed in the U.S. and the U.K., has benefited in recent quarters from low fuel prices, higher prices and strong bookings.

In its press release Tuesday, Carnival said bookings for the rest of the year are well ahead of the prior year at slightly higher prices. The company, which operates Carnival Cruise Lines as well as the Princess, Cunard and Holland America lines, also said that since March, bookings have been at higher prices but volumes have been running lower because there is less available inventory remaining this year.

For the period ended May 31, Carnival reported a profit of $605 million, or 80 cents a share, up from $222 million, or 29 cents a share, a year earlier. Excluding fuel-hedging impacts and other items, per-share earnings rose to 49 cents from 25 cents. The company had forecast adjusted per-share profit of 34 cents to 38 cents.

Revenue increased 3.2% to $3.7 billion; analysts had expected revenue of $3.68 billion.

Excluding currency effects, net revenue yields -- a measure of revenue relative to capacity -- rose 3.6%, above the company's guidance for an increase of 1.5% to 2.5%.

Excluding fuel expenses, net cruise costs decreased 1.9%, compared with estimates for an increase of between 0.5% and 1.5%. The company attributed the lower costs to a shift in the timing of expenses.

For the fiscal year ending in November, the company narrowed its per-share earnings estimate to $3.25 to $3.35 on a 3.5% increase in net revenue yields, excluding currency fluctuations. The company previously had projected per-share profit of $3.20 to $3.40 and net revenue yield growth of roughly 3%, excluding currency fluctuations.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

June 28, 2016 10:41 ET (14:41 GMT)

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