Carnival Corporation & PLC Reports Fourth-Quarter, Full Year Earnings

Carnival Corporation & plc announced non-GAAP net income of $216 million, or $0.28 diluted EPS for the fourth quarter of 2011. Reported net income, which includes net unrealized gains on fuel derivatives of $1 million, was $217 million, or $0.28 diluted EPS. Net income for the fourth quarter of 2010 was $248 million, or $0.31 diluted EPS. Revenues for the fourth quarter of 2011 were $3.7 billion compared to $3.5 billion for the prior year.

Non-GAAP net income for the full year 2011 was $1.9 billion, or $2.42 diluted EPS, compared to net income of $2.0 billion, or $2.47 diluted EPS, for the prior year. Full year 2011 reported net income was $1.9 billion, or $2.42 diluted EPS. Revenues for the full year 2011 were $15.8 billion compared to $14.5 billion for the prior year.

The company recently implemented a fuel derivatives program to mitigate a portion of its economic risk attributable to potentially significant fuel price increases. The company believes it is more meaningful to evaluate its earnings performance by excluding the impact of unrealized gains and losses on its fuel derivatives from non-GAAP net income and diluted earnings per share until the gains or losses are realized. For further information on the company’s fuel derivatives program see “Fuel Derivatives” below.

At this time, cumulative advance bookings for 2012 are at slightly higher prices with slightly lower occupancies compared to the prior year. For the last six weeks, booking volumes for the first three quarters of 2012 are running well ahead of the prior year at lower prices.

Based on current booking trends, the company forecasts full year 2012 net revenue yields, on a constant dollar basis, to be up 1.0 to 2.0 percent. The company expects net cruise costs excluding fuel per ALBD for the full year 2012 to be in line with the prior year on a constant dollar basis. At current exchange rates, full year 2012 net income is expected to be reduced by $135 million or $0.17 per share compared to 2011 due to changes in currency exchange rates.

Taking all the above factors into consideration, the company forecasts full year 2012 non-GAAP diluted earnings per share to be in the range of $2.55 to $2.85, compared to 2011 non-GAAP diluted earnings of $2.42 per share.

During 2012, the company will introduce three new ships. Costa Fascinosa is scheduled for delivery in April, while AIDAmar and Carnival Breeze are scheduled for delivery in May. Recently, P&O Cruises (Australia) sold Pacific Sun which will leave the fleet in July 2012.

First quarter constant dollar net revenue yields are expected to increase 1.5 to 2.5 percent compared to the prior year. Net cruise costs excluding fuel per ALBD for the first quarter are expected to be up 3.5 to 4.5 percent on a constant dollar basis compared to the prior year due primarily to the higher number of dry-dock days and related costs versus the prior year. Fuel costs for the first quarter are expected to increase $93 million compared to the prior year, costing an additional $0.12 per share.
 
Based on the above factors, including the higher fuel prices, the company expects non-GAAP diluted earnings for the first quarter 2012 to be in the range of $0.06 to $0.10 per share versus 2011 non-GAAP earnings of $0.19 per share.