Cruise operator Carnival posted a year-on-year decline in net revenue yields for the third quarter to the end of August despite continuing strength in fleetwide booking volumes and pricing trends since June.
Net revenue yields (NRY) in constant dollars fell 5.3%, or 2.1% excluding Costa, compared to the same period the previous year. NRY for 2012 are expected to be flat, or slight down on the same period last year. Including Costa, this will be a decline of 3.0%.
Changes to currency exchange in the three month period reduced earnings by $0.09 per share compared to the prior year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The company warned that for the remainder of 2012 and the first half of 2013, cumulative advance bookings (excluding Costa) are still behind the prior year at slightly lower prices. Although cumulative advance bookings for Costa have improved, they are still five occupancy points behind the prior year at lower prices.
Net cruise costs excluding fuel per available lower berth per day (ALBD) for 2012 are expected to be down slightly compared with the prior year on a constant dollar basis.
Higher revenue yield expectations and improvement in costs compared to June guidance have been offset by $0.13 per share of unfavorable changes in fuel prices and currency exchange rates.
Non-GAAP earnings per share (EPS) came in at $1.53, while US GAAP EPS totalled $1.71, which includes unrealised gains on fuel derivatives of $136m.
Chairman and Chief Executive Officer Micky Arison said: "The significant efforts of our brand management teams were successful in partially mitigating the decline in cruise ticket prices. Onboard revenue yields (constant dollars excluding Costa) improved three percent during the quarter. Our brand managements' continued focus on cost containment contributed to a three percent reduction in cruise costs (constant dollars excluding fuel) as well as a six percent reduction in fuel consumption on a unit basis.
"Looking forward, we remain committed to a measured pace of newbuilds and achieving a strategic balance of supply and demand in established markets. Our lower capital commitments should result in significant excess free cash flow in the coming years which we intend to return to shareholders.
"The pace of booking volumes remains healthy enabling us to continue to catch up on occupancy levels, while pricing has gradually improved. Both of these trends leave us well positioned for a recovery in cruise ticket prices beginning in the second quarter of 2013."
The share price rose 3.4% to 2,343p by late afternoon.
NR
1,000 children hold over £100,000 in a junior ISA – how to grow tax-free nest egg for your child
How to start investing: a beginner’s guide
