This summary is based on the third quarter fiscal 2007 earnings call conducted by Carnival Corporation (CCL) on September 20, 2007.
Vice Chairman of the Board, Chief Operating Officer: Howard S. Frank
Chief Financial Officer, Senior Vice President: David Bernstein
Chairman of the Board and Chief Executive Officer: Micky Arison
Vice President, Investor Relations: Beth Roberts
Key Investors Issues
- EPS were $1.67 a share compared to $1.49 a share last year.
- Net income was $1.38 billion, up from $1.23 billion a year ago.
- Revenue came in at $4.32 billion, up from $3.91 billion a year ago.
Third Quarter Highlights
Net income was $1.4 billion.
- Earnings per share were $1.67. For 2006 third quarter, the earnings per share were $1.49.
- EPS exceeded previous guidance for the third quarter by 6 cents per share. The improvement was primarily driven by stronger pricing on bookings taken close to departure, as well as the lower tax provision as a result of the resolution of certain of tax uncertainties, which helped to the tune of about 0.15 cents per share.
Capacity increased 9.4%.
- Net revenue yields in current dollars increased 2.5%.
- In constant dollars, which eliminate the effect of currency changes, net revenue yields were flat for the third quarter. This was at the higher end of the range of previous guidance.
- The sale of Swan Hellenic and Windstar brands decreased net revenue yields by 0.3%, compared to last year, given the fact that these brands have achieved higher yields on average.
The sale of Swan Hellenic and Windstar will continue to effect the year-over-year comparisons through the second quarter of 2008.
- Therefore, on an apples-to-apples basis, excluding Swan Hellenic and Windstar, net revenue yields in constant dollars actually increased 0.3% compared to the prior year.
The company saw yield improvements in North American brands, which was offset by lower yields in constant dollars in European brands.
- European brands are being compared against a strong prior year and despite the lower yields, operating income in constant dollars for European brands was up.
- China’s yields improved, driven by both price and occupancy, which resulted from decision to shift sourcing strategy for costs to Asia.
On the cost side, costs per available lower berth day in current dollars were up 3.3%.
However, in constant dollars, they were up 0.8%. This was better than the previous guidance.
Fuel prices this year were higher than the third quarter of last year, costing an additional $20 million.
- Excluding fuel in constant dollars, cruise cost per available lower berth day was actually down 0.2%.
- The improvement seen versus guidance was essentially due to the timing of certain expenses between the third and fourth quarter, and as a result, cost guidance for the year remains unchanged.
In July, the company resumed stock buy-backs in the U.K. market.
The company repurchased a total of 4.5 million shares for $195 million. In total, the company has repurchased 31.8 million shares for $1.4 billion out of the $2 billion previously authorized by Board of Directors, leaving $578 million remaining under the repurchase authorization. Board of Directors increased the remaining repurchase authorization back to $1 billion, effective immediately.
Year-to-Date Financial Highlights
- Net income is $2.1 billion.
- The earnings per share are $2.51 per share.
Fourth Quarter 2007 Outlook
