Carnival posts net loss of $15 million in first quarter of 2014

MIAMI — Carnival Corporation & plc, for years one of the most profitable companies in the travel business, posted a net loss of $15 million in the first quarter.

For the first quarter of 2013, U.S. GAAP net income was $37 million. Revenues for the first quarter of 2014 were $3.6 billion in line with the prior year.

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald noted that first quarter non-GAAP earnings were better than anticipated in the company’s December guidance due to better than expected ticket prices for Carnival Cruise Lines and continental European brands, as well as the timing of certain expenses.

“We see progress with our continental European brands and continue to be pleased with Carnival Cruise Lines’ pace of improvement. Exciting product innovations and strategic marketing initiatives at Carnival Cruise Lines have driven strong close-in demand resulting in sequential improvement in year-over-year quarterly ticket prices for the brand.”

During the quarter, Carnival Cruise Lines announced an exclusive partnership with Dr. Seuss Enterprises to bring the children’s brand and favourite characters to its fleet and the Carnival LIVE Concert Series, which brings the best in live music to the seas with a diverse roster of popular music artists including Jennifer Hudson, Lady Antebellum and Jewel. These brand building initiatives complement the continued roll-out of its Fun Ship 2.0 product enhancement program, as well as ongoing travel agent outreach and the unprecedented Great Vacation Guarantee.

Since January, booking volumes for the remainder of the year are running well ahead of last year at lower prices. At this time, cumulative advance bookings for the remainder of 2014 are ahead of the prior year at prices below prior year levels.

Donald noted, “We have experienced a solid wave season, with booking volumes up almost 20% globally surpassing last year’s cumulative advance booking levels, albeit at lower prices. Many guests are booking further in advance, which increases visibility and builds confidence that yield comparisons will turn positive in the second half of 2014. Increased interest across our brands is an encouraging indication that our message is resonating as consumers recognize the strong value proposition and exceptional vacation experiences we provide.”

The company continues to expect full year 2014 net revenue yields, on a constant dollar basis, to be down slightly compared to the prior year (in line with the prior year on a current dollar basis). The company also continues to expect net cruise costs excluding fuel per ALBD for full year 2014 to be slightly higher than the prior year on a constant dollar basis.