Carnival Corp & plc, the Anglo-American cruise shipping giant, says it expects yields to rise much more than anticipated in December, but warns that a firmer dollar will have a negative impact.
Based on current booking strength, the company expects full year 2015 net revenue yields to increase 3% to 4% on a constant currency basis, which excludes translation and transactional currency impacts, compared to the prior year. "This is one full (percentage) point better than December guidance on a constant currency basis," Carnival said.
On a constant dollar basis, which does not exclude the unfavourable transactional impact of currency, the company still expects yields to be approximately 2% higher than the prior year. The company expects net cruise costs excluding fuel per ALBD for full year 2015 to be up 2% to 3% percent compared to the prior year on a constant dollar basis, which is better than December guidance of up 3% due primarily to the favorable transactional currency impact.
Since December, unfavourable changes in currency exchange rates (constant currency) have reduced full year 2015 earnings expectations by $219 million, or $0.28 per share. However, this impact has been significantly offset by the improvement in the company’s operating performance, resulting in just a $0.05 reduction to the midpoint of December guidance.
Taking the above factors into consideration, the company forecasts full year 2015 non-GAAP diluted earnings per share to be in the range of $2.30 to $2.50, compared to 2014 non-GAAP diluted earnings of $1.93 per share.
Looking forward, Donald stated, “Consistent with many global companies, the strengthening of the U.S. dollar has hampered our full year earnings expectations, masking the 3% to 4% (constant currency) yield increase our collective brands are expecting to achieve. 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.”
