Driven by higher ticket prices and fuller ships, Carnival
Corp. had net income of $605 million in the second quarter, up from $222
million a year earlier.
Net revenue yields rose 3.6%, significantly higher than the
range of 1.5% to 2.5% in the company’s earlier forecast.
The results came despite a currency-exchange drag and fuel
price increase equal to $127 million.
“This was among the
most remarkable quarters in the history of the company,” said CEO Arnold
Donald, citing not only the earnings but the introduction of three new
flagships (Carnival Vista, Holland America Line’s Koningsdam and the AidaPrima)
and the historic launch of Cuba cruises by the new Fathom brand.
Carnival’s revenue advanced slightly to $3.7 billion from
The increase in yield was a combination of a 3.5% increase
in ticket prices and a 4% rise in onboard spending, CFO David Bernstein said.
Prices for Europe cruises on Carnival’s North America brands
are lower although occupancies are up, Bernstein said.
Donald positioned the decision by Britain to leave the
European Union as a boost for Cunard Line and P&O Cruises because their
fares in the weakened pound sterling are now more competitive with land
vacations abroad for British travelers.
Bernstein said every change of 10% or more in the pound’s
value has an effect of about 8 cents a share, or about $60 million, on
Carnival’s full-year results.
Donald said Carnival has looked at its U.K and European
forecasts in light of the Brexit vote. “At this point, we have no reason to
adjust anything,” he said.
Cruise stocks, including Carnival’s, were hit harder than
the market in general after the British vote. After the earnings release,
Carnival shares were up more than 4% but were up less than 0.25% by 11:30 am
Asked about the future development of Fathom, Donald said
that its cruises to the Dominican Republic are geared toward a “travel segment
rather than cruise,” and that Carnival’s ability to access that segment is “challenging.”
He said Cuba sailings on Fathom have been successful and are very strongly
booked for fall, but that there are still unsold cabins on summer departures.
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