Carnival Corp. reported lower net income for the fourth
quarter and fiscal year ended Nov. 30, but the fourth quarter beat projections
of analysts, which was apparently enough to ignite a small rally in Carnival
shares.
At noon, Carnival shares were up 6.6% to $49.73 a share.
Fourth-quarter net income was $423 million on revenue of
$4.78 billion. Last year, Carnival earned $494 million on revenue of $4.45
billion.
The earnings translated to 61 cents a share, which was 10
cents per share higher than the consensus of analyst forecasts.
For all of 2019, Carnival earned $3 billion, down from $3.2
billion a year earlier.
It isn’t clear that there is a lot to cheer about in
Carnival Corp.’s outlook, judging from some comments made by CEO Arnold Donald
in remarks to analysts.
Although he was upbeat in many respects, Donald said one of the
company’s chief problems in 2019, sputtering demand for its European brands, is
likely to “remain a headwind” in 2020. He said supply growth in Europe, which
was 20% this year, will slow to 5% next year but that the “yield challenges”
facing Carnival Corp. will be similar to 2019.
He said Carnival Corp. has adapted by reducing the number of
exotic itineraries for its European brands, substituting those that are
convenient, affordable and closer to home. He also noted that the company has
agreed to sell two Costa ships in 2020 and a third in 2021, to be replaced by
the new Costa Smerelda, a more efficent and more lucrative ship.
Carnival said it expects full year 2020 adjusted earnings
per share to be in the range of $4.30 to $4.60 compared to 2019 adjusted
earnings per share of $4.40.