Stronger pricing pushes up Carnival's Q4 profit

Q4 net revenue yield increased 4.1% in constant currency, better than Carnival's September guidance of up 3%.

US GAAP profit was $270m, or 35 cents per share, up from a loss of 13 cents per share a year ago. Adjusted for non-recurring costs and restructuring expenses, profit was $389m, or 50 cents per share, up from adjusted EPS of 27 cents a year ago, and more than the Wall Street consensus expectation of 41 cents.

Full year 2015 US GAAP profit was $1.8bn, or $2.26 EPS, which included non-cash losses on fuel derivatives of $332m and other net charges of $17m. That compares to the 2014 US GAAP profit of $1.2bn, or $1.56 EPS, including non-cash losses on fuel derivatives of $268m and other net charges of $20m. 2015 adjusted profit was $2.1bn, or $2.70 EPS, up from $1.5bn, or $1.93 in 2014.

Revenues for 2015 were $15.7bn, lower than the $15.9bn in 2014 due to the unfavorable impact of more than $800m from currency exchange rates.

'We nearly doubled our fourth quarter results and ended the year with 40% higher earnings. Strong operational execution delivered 25 cents per share higher earnings than the mid-point of our full year 2015 December guidance, despite a 10-cent drag from the net impact of currency and fuel prices,' said Arnold Donald, president and ceo of Carnival Corp. & plc.

Donald noted net yields improved 4.3% this year in constant currency due to higher on-board revenues and ticket prices, and Carnival has driven demand in excess of capacity growth while leveraging its scale to contain costs.

Currently, cumulative advance bookings for the first three quarters of 2016 are well ahead of the prior year at slightly higher constant currency prices. Since September, booking volumes for the first three quarters of 2016 are in line with last year’s levels at higher prices.

'As we had anticipated, with less inventory remaining for sale, we have begun to sell at higher prices than the same time last year, particularly close to departure, affirming our expectation of continued yield improvement in 2016,' Donald said.

The company forecasts full year 2016 adjusted EPS in the range of $3.10 to $3.40. Q1 adjusted EPS is projected in the range of 28 cents to 32 cents, up from 20 cents in Q1 2015.