26th Sep 2019 14:45
(Alliance News) - Carnival PLC on Thursday lowered earnings guidance for both the fourth quarter and for the twelve months to the end of November due to the rising price of fuel.
The stock was down 7.0% on Thursday at 3,403.00 pence a share, making it the third worst performer in the large-cap index in London.
The FTSE 100-listed company expects full year adjusted earnings per share to be in the range of USD4.23 to USD4.27, reflecting recent fuel price increases, compared to June guidance of USD4.25 to USD4.35, and adjusted earnings per share of USD4.26 in financial 2018.
For the fourth quarter, Carnival expects adjusted earnings per share to be in the range of USD0.46 to USD0.50 versus adjusted earnings per share of USD0.70 in the final quarter of its financial 2018.
"Due to an USD0.08 impact from the recent spike in fuel prices caused by geopolitical events, we are reducing our full year guidance by USD0.05 per share," explained President & Chief Executive Arnold Donald.
Turning to third quarter results, the cruise operator said net income for the three months to the end of August totalled USD1.8 billion, up 5.9% from USD1.7 billion reported the year earlier, as revenue grew 12% to USD6.5 billion from USD5.8 billion.
Adjusted net income also rose 5.9% to USD1.8 billion from USD1.7 billion the year before. Adjusted net income excludes net charges of USD39 million for the third quarter and net gains of USD34 million for the third quarter of 2018.
Net cruise costs excluding fuel per available lower berth day, or ALBD, decreased by 3.2% in constant currencies.
This was better than the 0.5% to 1.5% increase that Carnival guided in June, due to the timing of expenses between quarters and cost improvements realised during the quarter. ALBD is a measure of passenger capacity in the cruise industry.
The company expects full year net cruise costs excluding fuel per ALBD in constant currency to be up by 0.3% versus the prior year, compared to June guidance of up 0.7%.
Cumulative advanced bookings for the first half of financial 2020 are ahead of the prior year at prices in line with prior year, Carnival noted. However, the company said since June both booking volumes and prices for the first half of its next financial year have been running lower than a year ago.
Carnival expects fuel expense for financial 2020 to be USD1.8 billion compared to USD1.6 billion expected for financial 2019.
Donald said: "While we are subject to uneven economies in the short run, the global aspect of our business has proven to be a strength over time, producing our industry leading position with over USD5 billion in cash from operations, attractive returns on capital and the strongest balance sheet in the industry."
By Evelina Grecenko; [email protected]
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