Carnival boosts full-year EPS guidance

Carnival saw net revenue yields grow near the top end of the company's guidance for the third quarter of its fiscal year, as management boosted its full-year guidance for earnings per share and sounded an optimistic note on its bookings for the next fiscal year.

Commenting on the results, company chief Arnold Donald said: "We are well on track to deliver nearly 25 percent earnings growth in 2016. With cash from operations expected to reach a record $5 billion this year, we continue to fund our growth and return cash to shareholders."

The cruise line operator reported a 2.7% increase in net revenue yields for the three months ending on 31 July in constant currency terms, which was towards the top end of the between 2.0% and 3.0% rise projected by the firm.

In parallel, net cruise costs, excluding fuel per available berth, were 5.5% higher, below the between 6.0% and 7.0% increase expected.

Total revenues were 4.3% higher to reach $5.1bn and quarterly net income improved 17% to $1.42bn, for earnings per share excluding some gains of $1.92.

For the full-fiscal year 2016, Carnival said it now expected earnings per share in a range of between $3.33 to $3.37, versus the $3.25 to $3.35 it had guided towards in June.

In 2015 Carnival achieved EPS of $2.70.

Fourth quarter 2016 adjusted EPS was now seen coming at between $0.55 to $0.59, against $0.50 one year ago.

Cumulative advance bookings for the first half of next year were described as running above those of the prior year and at considerably higher prices.

Full-year net revenue yields were still seen up by roughly 3.5% in comparison to those of a year ago on a constant currency basis, the company said in a statement.

“In addition, CCL management is establishing an encouraging track record of under-promising and over-delivering. Given the secular growth attraction of the industry (appeal to an attractive cohort of wealthy middle-aged customers, high satisfaction scores, rapid growth and huge potential in China, low vacation industry penetration rates) and the improving returns/cash flow profile, the stock is starting to look very sound value,” Numis analyst Wyn Ellis said in a research note sent to clients.

As of 1438 BST, shares in Carnival were rising by 1.03% to 3,644p.