Carnival Corporation (
reported fourth quarter 2012 adjusted earnings of 13 cents per
share, in line with the Zacks Consensus Estimate. For full fiscal
2012, adjusted earnings per share were $1.88 versus $2.42
recorded in the last year.
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On a GAAP basis, the company reported earnings for fourth quarter
2012 of 12 cents per share which was lower than the year-ago
quarter earnings of 28 cents per share. Unfavorable changes in
currency and fuel prices hurt the full-year earnings by 39 cents
Total revenue in the fourth quarter of 2012 decreased 3.2% year
over year to $3,579.0 million but surpassed the Zacks Consensus
Estimate of $3,532.0 million. For full-fiscal 2012, revenues were
$15.4 billion, down 2.5% year over year.
For fourth quarter 2012 on a constant currency basis, net revenue
yields declined 4.5% year over year. Gross revenue yields fell
5.7% at current dollars due to unfavorable fluctuations in
currency. Net cruise costs, excluding fuel per available lower
berth day (ALBD), decreased 0.9% year over year on a constant
dollar basis. Fuel price of $716 per metric ton was up 5.4% year
Revenue declined to $2,659.0 from $2,821.0 million in the fourth
quarter of 2012.
Onboard and Other:
Revenue increased to $894.0 million from $847.0 million in the
fourth quarter of 2012.
Tour and Other:
Revenue for the segment declined to $26.0 million from $28.0
million in the fourth quarter of 2012.
At the end of 2012, the company had cash and cash equivalents of
$465 million, long-term debt of $7,168 million and shareholder
equity of $23,929 million.
First Quarter 2013 Guidance
Management expects net revenue yield on a constant dollar basis
to decline 2.0−3.0%. Net cruise costs per ALBD, excluding fuel
are expected to be down 1.5−2.5% on a constant dollar basis. On a
current dollar basis, net cruise costs per ALBD, excluding fuel,
are projected to be down 1.5−2.5% and net revenue yields are
projected to be down 1.5−2.5%. Fuel price is expected to be $674
per metric ton.
Based on current fuel prices and currency exchange rates, the
company expects adjusted diluted earnings in the range of 3−7
cents per share.
Full Year 2013 Guidance
Carnival expects net revenue yields to increase in the range of
1.0−2.0% on a constant dollar basis and 1.5−2.5% in current
dollars. Net cruise costs per ALBD, excluding fuel, are projected
to be up 1.0−2.0% on a constant dollar basis and 1.5−2.5% in
current dollars. Fuel expenses are estimated at $692.0 per metric
Considering abovementioned figures, Carnival expects adjusted
earnings in the range of $2.20−$2.40 per share.
We believe that Carnival is recovering at a steady pace from the
Costa disaster and we expect the Costa cruises to swing back to
profitability next year. The company is also experiencing
increase in on-board revenue yields as well as booking volume.
Since third quarter 2012, booking volumes for the coming three
quarters, including Costa, are running in line with the strong
booking volumes experienced last year at somewhat lower prices.
Moreover, its cost containment efforts are also paying off.
However, the sluggish European economy that led to an uncertain
consumer confidence in Europe and higher overall unit costs pose
major threats to the company in 2013. The adverse currency
translations and surging fuel prices are another cause of
Carnival, which competes with
Royal Caribbean Cruises Ltd. (
, currently retains a Zacks #3 Rank (short-term Hold rating). We
also reiterate our long-term Neutral recommendation on the