Carnival Corp.'s Uplifting Report Floats All Boats
Bruce Parkinson, Open Jaw
Carnival Corp. CEO Arnold Donald
Cruise stock prices have encountered rough seas in the past month, so there was a lot of anticipation about Carnival Corp.'s first public comments about business in the aftermath of three major hurricanes.
President/CEO Arnold Donald didn't disappoint, telling a Wall Street audience that despite obstacles ranging from hurricanes to global uncertainty, business has been strong, and indicators signal it will be well into the foreseeable future. Cruise stocks gained upon the report.
"Our record results, coupled with strong booking trends, have more than offset anticipated earnings impact from these weather disruptions, enabling us to raise the midpoint of our guidance and positioning us to achieve the higher end of our previous earnings guidance range," Donald said,
On the trade side, there was a pleasing indicator in the "commissions, transportation and other" line item. These expenses were strongly up for Q3, from $646 million for the three months ended 31AUG, 2016, to $699 million for the same time period 2017, an increase of over 8%.
That $53 million increase in one quarter is the biggest single increase CruiseWeek has seen since launching this publication in 1995, though of course the corporation has continually increased capacity, so the absolute numbers would be expected to grow.
One caveat regarding Carnival Corp.’s numbers is that the deadly hurricanes began hitting business after 31AUG, so the waters are murky now. Nevertheless, many agents are well positioned to weather some turbulence in the coming months.
In his opening remarks, Donald went out of his way to praise and thanks agents, an unusual act when speaking to financial types, who mostly see agent commissions as an expense to be trimmed as closely as possible. But it was perhaps a recognition of the role agents will play convincing clients that all is not devastated in the Caribbean and that carefree cruise vacations can be had.
"Look, our consistently strong financial performance is due to the achievements of our 120,000 employees around the world who deliver exceptional guest experiences day in and day out, even when faced with daunting challenges like the recent weather disruptions,” said Donald.
“But of course, it would not be possible without the strong support of our valued travel agent partners.”
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years.