Carnival Reports Q1 2004

All Carnival Corporation brands are performing extremely well, according to Vice Chairman and COO Howard Frank who spoke to analysts on the company's conference call on first quarter earnings.

"It looks like we are headed for a solid year," Frank said, giving earnings guidance for the full year in the range of $2.05 to $2.15 per share, compared to $1.66 for 2003 and $1.73 for 2002.

Q1 04

Carnival reported net income of $203 million, or $0.25 per share, on revenues of $2.0 billion for its first quarter ended Feb. 29, 2004, compared to net income of $127 million, or $0.22 per share, on revenues of $1.0 billion for its first quarter of 2003.

The results include P&O Princess Cruises, which Carnival acquired last April.

The earnings increase was attributed to "very strong onboard revenues" and pricing picking up, according to Gerald Cahill, executive vice president and CFO.

Carnival also delayed some advertising expenditures until later in the year and continued to benefit from savings obtained from P&O Princess synergies. Cahill said that the company was on track to achieve the $100 million in synergy savings for the year that it had projected.

With a higher share of its capacity now in Europe, revenues will also be more seasonal, with a bigger boost coming during the summer season.

Outlook

Said Frank: "Bookings are running 62 percent higher than at this time last year for the last nine months of the year." While bookings were down in Spain (following the Madrid bombings) bookings elsewhere in Europe remained strong, and Frank said that Costa Crociere expects that Spain will pick up again.

A particularly strong performer this year has been Princess Cruises, according to Frank.

Frank went on to say that the QM2 is also performing extremely well as are the other brands, including Holland America Line, and that the "forward looking pictµre appers quite good."

"We are seeing pent-up demand coming back into the market," Frank said, adding that Carnival Cruise Lines recently had its best booking week ever.

Frank said that for the company as a whole bookings were running four percent ahead of capacity and occupancy was five percent ahead of last year (adjusted for the capacity increase), while pricing was running six percent higher than last year.

With bookings trending further out, Frank was also able to say that occupancy for Q4 was running 10 percent ahead of last year.

Bookings taken during the last two weeks have been running 100 percent ahead of last year, according to Frank.

Carnival's strategy is to start out with somewhat lower prices to avoid last minute discounting and instead hoping to raise prices closer to sailings.

"The message to consumers is that this is a great time to book, because we expect prices to go up," Frank said.

Newbuilds

The exchange rate issue is still there, according to Frank, who said that with the high euro it is "tough to get the returns you need. We can still order ships for the European market, however," he added.

"We are very encouraged by what we are seeing at Aoda Cruises , P&O Cruises and Costa," Frank continued.

He noted that pricing on older ships tend to be driven by itineraries. While newer ships get higher prices for veranda cabins, they do not get much higher prices for inside cabins.

Cahill added that onboard revenue was up four percent year-over-year, compared to the normal growth rate of two-to-three percent per year.

Overall, Carnival will grow its capacity by 17.5 percent in 2004, 9.2 percent in 2005 and 5.3 percent in 2006.

While Frank said it was too early to forecast earnings for 2005, he said he was very encouraged by 2004.

But Carnival is predicting what it calls substantial free cash flow in 2005 - in excess of what is needed for its newbuilding program. The company has three options, according to Frank: increase dividends, pay down debt or repurchase stock. That decision will be taken when they get there (2005), he said.

Cruise News | Top Cruise Stories

Celebrity Edge and Apex

Seven Celebrity Ships to Sail in Europe in 2023

Oct 19, 2021
Celebrity Cruises today announced its exciting European deployment for 2023, which will offer more…
Freedom of the Seas sailing from Miami

Royal Caribbean Group Restart: Eight Additional Ships…

Oct 18, 2021
As the winter approaches, the Royal Caribbean Group brands are expanding their restart plans,…
Carnival Sunshine

Sailing or Waiting, This Is Where Each Carnival Cruise…

Oct 15, 2021
Following a few months of actively putting ships back into service, Carnival Cruise Line has 13…
Captain Kate McCue the first American female cruise ship captain watches as construction continues

Captain Kate McCue to Take Helm of Celebrity Beyond

Oct 14, 2021
Celebrity Cruises President and CEO Lisa Lutoff-Perlo has announced that Captain Kate McCue, the…
John Padgett

Carnival Corp. Names John Padgett as President of…

Oct 12, 2021
Carnival Corporation has announced John Padgett as the new president of Princess Cruises, effective…
Celebrity Millenium

Three Celebrity Ships for Alaska 2023 Season

Oct 12, 2021
Celebrity Cruises announced today plans for three ships to return to Alaska for the 2023 Summer…
Carnival Mardi Gras

Carnival Corporation Cruise Restart Hits 50% Mark

Oct 12, 2021
Gradually adding ships back into service, Carnival Corporation is set to reach a major milestone at…
Koningsdam

Koningsdam Set to Resume Service, Kicking Off First…

Oct 10, 2021
Holland America Line is resuming service on the West Coast today, as the Koningsdam welcomes guests…
Carnival Breeze

Carnival Cruise Line Announces Ship Restarts For…

Oct 06, 2021
Carnival Cruise Line announced plans for more ship restarts for January and February, as it works…
IMG 20211006 WA0003

Steel Cut for Explora II, Second Ship for MSC’s New…

Oct 06, 2021
The first steel of the Explora II, the second of four new-concept luxury cruise ships that…
Cruise ships in Cadiz

Eight Cruise Ships in for Refurbs at Navantia in Cadiz

Oct 04, 2021
With cruise restart accelerating around the globe, the drydock frenzy continues to keep shipyards…
Costa Smeralda

Brazil Says Cruise Is A Go, 2021-2022 Season Is On

Oct 04, 2021
With government permission now granted, cruise ships are returning to Brazil in November. After…
Viking Sun in China

At Last: China Sees Cruise Resumption with Viking…

Oct 02, 2021
The 930-passenger Zhao Shang Yi Dun – formerly known as the Viking Sun sailing for Viking Ocean…
Norwegian Star

Norwegian Cruise Line Ship by Ship Location Update

Oct 01, 2021
With six ships back in service and several others being prepared for their restarts, the Norwegian…
SeaDream 800

SeaDream II Becomes First Ship to Resume Sailing in…

Sep 30, 2021
SeaDream Yacht Club has reported that it has become the first cruise line to sail in the Black Sea…

Email Newsletter

Get the latest breaking cruise news. Sign up.

Cruise Ship Orderbook

92 Ships | 198,372 Berths | $57 Billion | View

New 2021 Expedition Report

Cruise Industry News Expedition Cover

Highlights:

Market Overview

Complete Insight

2027 Outlook

New Players

Full Coverage

Order Today

All New 2021 Annual

Cruise Industry News 2021 Annual

Highlights:

Entire Industry

Supply Data

All Companies

400 Pages

Digital Access

2027 Outlook

Order Today