Nomura Revises Earnings Estimates for Carnival

Nomura Equity Research has revised its 2012/2013 EPS expectations to reflect lower yields in Europe and higher SG&A costs, which are likely to result from the Concordia incident, according to Analyst Harry C. Curtis . Nomura’s 2012 EPS estimate declines to $2.36 from $2.59 due to lower capacity (-$0.07), yields (-$0.16), and higher SG&A (-$0.01) and a small benefit from an increased share repo (+$0.01). The 2013 estimate falls to $3.06 from $3.17 which now assumes that Carnival Corporation spends ~$300m of the insurance proceeds to repurchase stock. While Nomura does not expect a long-term impact, the price target declines to $36 from $39 due to lower near-term EPS power.

The Concordia cost 450mn euro in 2006 and has passenger capacity of 2,978, or roughly 2% of Carnival’s fleet. Removing its capacity from the model costs the company $0.07 per annum going forward. The extent of the damage has yet to be fully determined, but the ship could be beyond repair. The vessel is insured and Nomura expects the residual valued to be ~ $320m.

Yields for the remaining Costa brand, which is 14% of Carnival’s global capacity, could be down ~10% this year given the timing of the tragedy. January is a crucial time for European bookings because it is the onset of Wave Season (three months when +50% of bookings are made), according to Nomura's report.



Cruise Industry News Email Alerts



Email Newsletter

Get the latest breaking cruise news. Sign up.

Cruise Ship Orderbook

72 Ships | 162,750 Berths | $46 Billion | View

New 2022 Annual Report

Cruise Industry News Annual Report


100% Overview

Capacity Data

Through 2027

Regional Data

Brand by Brand

Order Today

2022 Expedition Report

2022 Expedition Market Report Cover


Mkt. Overview

Supply Data

All Operators

190+ Pages

PDF Download

Order Today