Carnival Corp. Swings To Q4 Profit, Full Year Earnings Up 40%

Open Jaw

Low fuel costs and higher ticket prices have led Carnival Corporation to a 40% increase in full year earnings, beating the expectations of analysts.

The cruise giant announced adjusted net income for the full year 2015 of USD 2.1 billion, compared to $1.5 billion for the prior year. 

Revenues for the full year 2015 were $15.7 billion compared to $15.9 billion for the prior year, a statistic Carnival attributed to a negative impact from currency exchange rates of over $800 million. The strong USD has been a challenge for Carnival as it makes ticket prices more expensive for foreign cruisers.

In the 4th quarter of the year, Carnival enjoyed fuel prices that were 46% lower than a year earlier, a steeper than projected decline. At the same time, the company raised ticket prices.

“We have begun to sell at higher prices than the same time last year, particularly close to departure,” said Chief Executive Arnold Donald.

Bookings for the 1st 3 quarters of 2016 are ahead of the prior year at slightly higher prices, the company said.

Q4 was particularly encouraging for Carnival. The company reported a profit of $270 million, up from a loss of $104 million in the year-before period. Revenue slipped 0.2% to $3.71 billion.

We nearly doubled our 4th quarter results and ended the year with 40% higher earnings. This year we achieved a 4.3% improvement in revenue yields compared to the prior year due to higher onboard revenues and increased ticket prices as we have driven demand in excess of capacity growth, while our ongoing efforts to leverage our industry-leading scale helped to contain costs.”

Looking forward, Donald stated, “We have accelerated progress toward and remain well positioned to achieve our double digit return on invested capital threshold in the next 2 to 3 years.”

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