Carnival makes waves with better-than-expected final figures

19th Dec 2013 14:29

- Net revenue yield better than recent guidance- Earnings not a low as expected- Net revenue yield to turn positive in H2 2014Ocean cruise operator Carnival impressed with its final results, as revenues and earnings declines were not as bad as feared thanks to a successful marketing push in the fourth quarter and encouraging noises about 'momentum' as it enters 2014.Earnings per share for the year to November 30th were down 18.6% to $1.58 from $1.94 the prior year, with fourth-quarter net revenue yields beating the company's September guidance with a decrease of 2.1% compared to the 3-4% expectation.The FTSE 100 company had issued a profit warning in May due mostly to cruise ticket pricing, greater-than-expected voyage cancellations and selling and administrative costs.But President and Chief Executive Officer Arnold Donald said while net revenue yields for 2014 were expected to be down this would only be "slight" and that the company was "catching up on booking volumes" and "gaining momentum" as it entered 2014. Analysts at Numis had said on Wednesday that the pace, timing and extend of yield recovery was the "$64m question"."We believe the compelling value we have in the marketplace will continue to stimulate strong demand leading to a solid wave period. We continue to expect revenue yields to turn positive in the second half of 2014 compared to the prior year."Carnival said current cumulative advance bookings for 2014 were behind the prior year, with prices flat, and net cruise costs excluding fuel for 2014 were expected to be slightly higher.The company guided to full-year 2014 earnings of between $1.40 and $1.80, with losses in the first quarter expected to be in the range of $0.07 to $0.11, compared to $0.09 this year.Donald said fourth-quarter results had been boosted by accelerated progress in Carnival Cruise Lines' brand recovery. "A steady stream of innovative product initiatives, the launch of a nationwide marketing campaign and travel agent outreach program, as well as an industry-leading vacation guarantee fueled the brand's improvement.""Even in a challenging year, our company continued to produce strong cash from operations approaching $3bn, funding our capital commitments and returning value to shareholders through regular dividend distributions of $775m and share repurchases of $100m."He said the company was "aggressively" seeking ways to leverage its scale to drive the top line and cut costs, helped by a management shake-up."As 2014 progresses, we will commence a number of strategic initiatives designed to fuel our earnings power, drive cash flow and improve return on invested capital over time."Shares in Carnival were up 4.97% to 2,301p.OH