NYSE-listed Carnival Corp has posted higher than expected profits and is poised to benefit from a lengthening booking curve.
The cruise giant reported net income of USD1.2 billion for the third quarter of 2015 (3Q15), unchanged from 3Q14. Excluding non-cash items, adjusted net income was USD1.4 billion in the latest period, equating to adjusted net income of USD1.75/share, well above analyst estimates of USD1.63/share.
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“Our third-quarter performance was the strongest of any quarter on record,” said Carnival Corp chief executive officer Arnold Donald. Currency adjusted net yields – the best indicator of passenger spending – rose 4.3% in 3Q15, topping the company’s previous estimate for a 2-3% increase.
Carnival now expects currency adjusted yields to rise 3% for fiscal year 2015, up from its previous forecast for an increase of 2-3%. The company now estimates that full-year adjusted earnings will be USD2.56-2.60/share, up significantly from previous guidance for adjusted earnings of USD2.35-2.50/share.
Bookings for 1H16 are “well ahead” of where 1H15 bookings were at this time last year. “We have driven a significant lengthening of the booking curve, which bodes well for continued year-over-year yield improvement,” said Donald.
According to Wells Fargo analyst Tim Conder, the cruise industry in general is “reconditioning consumers” to believe that “the best prices are available earlier in the booking cycle”.