Carnival Corp.: Most Caribbean ports are open for business

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Carnival Sunshine in Grand Turk
The Carnival Sunshine docked in Grand Turk in March 2017. Photo Credit: CathyRL/Shutterstock

Less than 10% of ports in the broader Caribbean have been shut down by hurricanes, leaving a large selection for itinerary planners to work with, Carnival Corp. CEO Arnold Donald said during the company's Q3 earnings call on Tuesday.

He gave a "ballpark estimate" of 7-9% of the ports in the Caribbean being severely impacted by the storms.

"We have 40-plus ports that were unaffected, plus our own [private destinations], plus Mexico," Donald said.

Donald specifically named San Juan, St. Thomas, St. Maarten, Dominica and Tortola as ports that were damaged and significant to some or all of Carnival's brands.

Carnival is estimating that hurricanes so far this year will shave $72 million to $86 million from 2017 earnings. Most of that is for canceled voyages and related expenses and lower occupancies after Hurricane Irma, CFO David Bernstein said. A small amount is for the estimated impact on bookings in the fourth quarter.

Donald said bookings slowed after Hurricane Irma as consumers were distracted from planning their vacations, but that most of the inventory for the fourth quarter is already sold. Cancellations are running less than 1% he said.

Higher cruise prices are more than offsetting the hurricane-related expenses, leading Carnival to raise its projection for full-year 2017 results to between $2.63 billion and $2.68 billion.

This year's net income will be reduced by a $392 million noncash write-off related to the P&O Australia brand, including the value of its ships, its trademark and goodwill.

Donald said P&O Australia has "a disproportionate amount of less efficient vessels" and resulting high operating costs. Cruise demand in Australia remains strong. Donald said the plan is to replace the fleet with more efficient ships over time, and that writing off the asset value clears the way for doing so. He said it represents less than 1% of Carnival Corp.'s assets.

In the third quarter, Carnival had net income of $1.3 billion, down from $1.4 billion a year earlier when Carnival did not have the $392 million write-off. Revenue advanced to $5.5 billion from $5.1 billion.

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