Carnival Cruises Past Earnings Estimate

Carnival Corp. (NYSE: CCL) reported fiscal third quarter 2012 adjusted earnings per share (EPS) of $1.53 on revenue of $4.68 billion. In the same period a year ago, the cruise line operator reported adjusted EPS of $1.69 on revenue of $563.1 million. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $1.44 and $4.68 billion in revenue.

The company’s chairman and CEO 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.

The company now expects full-year 2012 revenue to be flat to slightly down, excluding the company’s Costa line. Including Costa, Carnival expects revenues to be down 3%, which is slightly better than the 3% to 4% decline the company had previously forecast. Carnival also forecast full-year adjusted EPS at $1.83 to $1.87. The consensus EPS estimate calls for $1.83 and revenues are estimated at $15.34 billion, slightly above Carnival’s new guidance.

Carnival appears to be recovering from the Costa Concordia disaster in January in which at least 30 people died. That incident hit cruise line stocks, including Royal Caribbean Cruises Ltd. (NYSE: RCL), hard. In the months since, pricing on Carnival’s other lines has improved and bookings on the Costa line remain lower than last year and at “slightly lower prices.”

The company also forecast fourth-quarter adjusted EPS of $0.07 to $0.11, well below the consensus estimate of $0.18. Currency exchange rates, which cost the company $0.09 per share in the third quarter, are expected to have a negative impact of $0.08 per share in the fourth quarter.

Carnival’s shares are up almost 4% today, at $38.47, after posting a new 52-week high of $39.00 earlier today. The prior 52-week range is $28.52 to $38.14. Thomson Reuters had a consensus analyst price target of $38.71 before today’s report.

Paul Ausick