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Carnival - Steaming ahead on improved FY guidance

Nicholas Hyett | 28 June 2016 | A A A
Carnival - Steaming ahead on improved FY guidance

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Carnival plc Ordinary USD1.66

Sell: 1,142.50 | Buy: 1,143.50 | Change -35.50 (-3.01%)
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Carnival shares are up 4.9% following the announcement of second quarter results this afternoon. Net revenue yields (Net revenue per available lower berth day) were up 3.6% compared to a year earlier, beating guidance from March of an increase of between 1.5% and 2.5%, with net cruise costs down 1.9%, better than guidance of up 0.5% to 1.5%.

Carnival achieved adjusted net income for the quarter of $370m, or earnings per share of $0.49 compared to $0.25 a year earlier. The board has accelerated its share buy-back programme with the board yesterday approving the third $1bn share buy-back, coming after a 17% dividend increase in April.

During the quarter Carnival also became the first cruise company to begin voyages from the US to Cuba in more than four decades - under its Fathom brand. Other milestones included the re-mastering of the Queen Mary 2, opening of Holland America's Denali Square complex in Alaska and the introduction of three new ships (one each to AIDA Cruises, Holland America and Carnival Cruise Line).


Advanced bookings for the remainder of 2016 are reported to be "well ahead" of the prior year at slightly higher prices. Guidance for the full year improves with:

  • FY16 net revenue yields expected to be up 3.5%, compared to guidance of 3% in March
  • Net cruise costs expected to be up 1.5% for the year, compared to guidance of 2% in March
  • Adjusted earnings per share expected to be in the range pf $3.25 to $3.35, compared to guidance of $3.20 and $3.40 in March and $2.70 per share in FY15

Commenting on the results CEO Arnold Donald said:

"This is shaping up to be another strong year for our company as we expect over 20 percent earnings growth and are approaching a nine percent return on invested capital. We have accelerated progress toward our stated goal of achieving the double digit return threshold and have accelerated distributions to shareholders"

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.