Net Income Drops for Carnival, Despite Rise in Revenues

Carnival Cruise LinesIllustration. Source: Pixabay under CC0 Creative Commons license

US cruise operator Carnival Corporation has seen a drop in its second quarter net income, despite a rise in revenues.

U.S. GAAP net income for the quarter was USD 451 million, as opposed to USD 561 million from the second quarter of 2018.

In the second quarter ended May 31, 2019, Carnival’s total revenues were USD 4.8 billion, compared to the USD 4.4 billion from the same period a year before.

“Second quarter earnings included revenue growth from higher capacity and improved onboard spending, more than offset by a drag from fuel and currency compared to the prior year,” Arnold Donald, Carnival Corporation & plc President and Chief Executive Officer, said.

Gross cruise costs including fuel per available lower berth day (ALBD) increased by 9.6 percent, the company elaborated.

Looking ahead, Carnival expects expects full year 2019 adjusted earnings per share to be in the range of USD 4.25 to USD 4.35. Unfavorable impacts are expected to come from the technical issues affecting the cruising speed of Panama-flagged Carnival Vista, which forced the company to extend a number of the ship’s sailings. The issues affected the ship’s schedule in June and will extend into July.

Carnival also expects the US administration’s Cuba travel ban to have a negative impact of USD 0.04 to USD 0.06 per share.

“While the company was able to quickly adjust its itineraries to provide guests with attractive alternative vacation experiences, the suddenness of the regulatory change to this high yielding destination has led to a near-term impact on revenue yields,” the cruise operator said.

“This year, our growth has been hampered by a confluence of events, which we are focused on mitigating,” Donald added.

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