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.