Carnival Corp. more than doubled its year-over-year net income in the second quarter, as its European brands continued to post strong enough results to offset lower yields in the Caribbean.
Net income was $106 million, up from $41 million in Q2 2013.
Carnival CEO Arnold Donald said second-quarter results showed improvement over the first quarter, as well.
"Collectively, our brands are gaining momentum in our efforts to drive higher ticket prices," Donald said. "And we continue to expect sequential improvement in revenue yields, despite a more competitive environment in the Caribbean this summer."
Donald said companywide bookings are now running slightly ahead of the prior year, at higher prices, though last year's results were colored by the negative public reaction to the Carnival Triumph fire.
"It feels like we've turned a bit of a corner," Donald said in a conference call for Wall Street analysts.
Revenue for the quarter reached $3.6 billion, up from $3.5 billion a year earlier.
For the second consecutive quarter, Carnival officials did not specifically mention travel sellers in the call. The company launched its Carnival Conversations initiative to improve travel agent relations a year ago and had updated progress on the initiative for several quarters.
Carnival Corp. Chairman Micky Arison participated in the call but made no comments.
Donald and other officials said during the call that the promotional climate in the Caribbean for the third quarter is worse than they had indicated three months ago. They said Carnival was still making an effort to hold firm on prices at the expense of a few points of occupancy.
As a result, ticket prices in the Caribbean are higher than last year, but occupancy is lower, leading to an overall decline in revenue yields.
Industrywide, capacity in the third quarter in the Caribbean will be up 22% from a year earlier.
Donald said that Carnival has focused for several quarters on "price integrity" in a couple of markets. Asked if he was wedded to that strategy long-term, Donald declined to say he was.
"We continue to pursue that, and we will as long as we see net benefit," Donald said. "If ultimately we don't see net benefit, we will discontinue that."
Fuel consumption declined 6% from the same period a year earlier, while fuel prices also eased, from $683 a metric ton last year to $657 this year.
Carnival said that adjusting for gains on onboard ship transactions and a swing in unrealized gains or losses from fuel hedges, profits on a non-GAAP accounting basis were $80 million in the second quarter ended May 31, up from $57 million a year earlier.
Going forward, Carnival will have one less brand. Donald said Ibero Cruises, a Spanish subsidiary it bought seven years ago, will be folded into Costa Cruises, which he said has a strong presence in Spain. One of Ibero Cruises' two ships will leave the fleet, while the other, the Grand Celebration, will be renamed the Costa Celebration.
Donald said Carnival is well into the "largest-ever quantitative market research study of the cruise and leisure market" the company has ever undertaken. It has already looked at more than 30 million past-passenger comments about Carnival's brands.
He said Carnival is talking to both cruisers and noncruisers, trying to understand what they love about the brands in a bid to increase guest loyalty.