As well, investors were concerned about 2019 pricing.
Adjusted net income of $2.36 beats $2.32 consensus
Adjusted net income was $1.7bn, or $2.36 per share, above guidance and Wall Street's $2.32 consensus, as well as last year's $2.29. US GAAP net income was $2.41 per share, up from $1.83 a year ago.
Adjusted net income excludes unrealized gains and losses on fuel derivatives and other net charges, totaling $34m in net gains in the recent quarter, and unrealized gains on fuel derivatives of $65m and impairments and other net charges of $395m for Q3 2017.
Revenues were $5.8bn, up from $5.5bn.
'Strong execution delivered the highest quarterly performance in our company’s history, overcoming fuel and currency headwinds,' said Arnold Donald, president and CEO. 'At the same time, our strong cash flow and balance sheet enabled us to accelerate our opportunistic share repurchase program, investing almost $750 million in Carnival stock since the beginning of the third quarter, bringing the total investment to $4.4 billion in just three years, and leading to the second replenishment of our $1 billion repurchase program this year alone.'
Net revenue yields increased 2.9% in constant currency, better than June guidance of up 1.5% to 2.5%. Net cruise costs in constant currency excluding fuel per available lower berth day increased 2.7%, better than June guidance of up 3% to 4%, mainly due to the timing of expenses.
Fuel impact was 8 cents/share
Changes in fuel prices reduced earnings by 8 cents per share.
Based on the third quarter results and booking strength for the fourth quarter, the company now expects full year 2018 net yields in constant currency to be up approximately 3.5% compared to the prior year, better than June guidance of up approximately 3%.
Full year net cruise costs excluding fuel per ALBD in constant currency are forecast to be up approximately 1.5%, versus June guidance of approximately 1%, mostly due to the accounting treatment for ships sold during the quarter. Changes in fuel prices and currency exchange rates are expected to decrease earnings by 6 cents per share compared to June guidance and 18 cents per share compared to the prior year.
Full-year guidance range goes to $4.21 to $4.25
The full-year EPS forecast goes to $4.21 to $4.25, up from the prior $4.15 to $4.25, and compared to Wall Street's $4.24 forecast and 2017 EPS of $3.82.
Adjusted EPS for Q4 are expected in the range of 65 cents to 69 cents, compared to the year-ago 63 cents.
2019 outlook
At this time, cumulative advanced bookings for the first half of 2019 are ahead of the prior year at prices in line with the prior year. Since June, booking volumes for the first half of next year have been running significantly higher than the prior year at lower prices compared to the prior year.
More recently, during the first half of September, booking volumes for the first half of next year have also been running significantly higher than the prior year and at higher prices.
Based on these booking trends, the company expects continued net revenue yield improvement for the first half of 2019, albeit with increases less than the net yield guidance for the fourth quarter of 2018, primarily due to comparisons to a very strong prior year.
Analyst Sharon Zackfia with William Blair attributed the morning selloff in CCL shares to investors digesting the news about the early 2019 expected yield trends.
End-of-day stock update
After extremely high trading volume Thursday, CCL shares settled at $63.74, down 4.8%.
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