PANAMA (dpa-AFX) - Cruise operator Carnival Corp. & plc (CCL, CUK, CCL.L) on Friday reported a turnaround to profit in the first quarter, reflecting lower operating costs that more than offset a decline in revenue. Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates.
Looking ahead, the company forecast earnings for the second quarter below Street expectations and also lowered the top end of its earnings guidance for fiscal 2015, citing the impact of a stronger U.S. dollar.
The Miami, Florida-based world's largest cruise-line operator reported net income for the first quarter of $49 million or $0.06 per share, compared to net loss of $20 million or $0.03 per share in the prior-year quarter.
Carnival noted that changes in currency exchange rates reduced its earnings by $0.06 per share on a constant currency basis.
Excluding items, adjusted net income for the quarter was $159 million or $0.20 per share, compared to adjusted net loss of $3 million or break-even per share in the year-ago quarter.
On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.10 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter declined 2 percent to $3.53 billion from $3.59 billion in the year-ago period and missed analysts' consensus estimate of $3.57 billion.
Revenues from cruise passenger ticket sales for the quarter declined 4 percent from the year-ago period to $2.63 billion, while cruise on-board and other revenues grew 5 percent to $889 million.
On a constant dollar basis, net revenue yields, or net revenue per available lower berth day, increased 2 percent in the quarter. This was better than the company's December guidance of flat to up 1 percent.
Operating costs and expenses decreased 7 percent to $3.27 billion from $3.52 billion in the year-ago quarter, with fuel prices declining 38 percent to $406 per metric ton.
Looking ahead to the second quarter, Carnival forecast adjusted earnings in a range of $0.11 to $0.15 per share, while analysts are projecting earnings of $0.26 per share.
For fiscal 2015, the company now forecasts adjusted earnings in a range of $2.30 to $2.50 per share, compared to the prior range of $2.30 to $2.60 per share. Street is currently looking for full-year earnings of $2.50 per share.
Carnival noted that since December, unfavorable changes in currency exchange rates reduced its fiscal 2015 earnings expectations by $0.28 per share. However, this was significantly offset by the improvement in the company's operating performance, resulting in only a $0.05 reduction to the midpoint of December guidance.
Carnival noted that cumulative advance bookings for the remainder of 2015 are currently ahead of the prior year at higher prices.
The company now expects fiscal 2015 net revenue yields to increase 3 to 4 percent on a constant currency basis. The outlook is one full point better than the company's December guidance.
President and Chief Executive Officer Arnold Donald said, 'Our successful initiatives to drive both ticket and onboard revenue yields have improved our financial performance and we remain on track toward our goal of achieving double-digit return on invested capital in the next three to four years.'
Carnival said Thursday that it has entered into two strategic partnerships to add nine new cruise ships to its fleet over a four-year period starting in 2019.
CCL is currently trading at $47.65, up $3.23 or 7.27 percent on a volume of 3.04 million shares.
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