Carnival Corporation (NYSE:CCL) Q1 2015 Earnings Conference Call - Final Transcript

Mar 27, 2015 • 10:00 am ET


Carnival Corporation (NYSE:CCL) Q1 2015 Earnings Conference Call - Final Transcript


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Arnold W. Donald

This is Arnold Donald, CEO of Carnival Corporation & plc. Thank you all for joining us for our First Quarter 2015 Earnings Conference Call. Today I'm joined by our Chairman, Micky Arison, David Bernstein, our Chief Financial Officer, and Beth Roberts, our Vice President of Investor Relations.

Before I begin, please note that, as some of our remarks on this call will be forward-looking, I must refer you to the cautionary statement in today's press release. We are off to a strong start with our significantly improved first quarter earnings exceeding both prior year and December guidance. It is extremely gratifying to see the hard work of our team members pay off. It is the power of their efforts which have allowed us to overcome much of the impact of the dramatic currency movements that have plagued all global companies. Consistent with the strengthening of our business, our travel partners are helping to drive and are benefiting from our improved performance. And we especially thank them for their support.

Now, despite the nearly $0.30 drag from currency movements, we continue to expect roughly 25% earnings growth over 2014, based on our improved operating performance. Looking ahead, we are working hard to accelerate that growth as we continue to execute along a path towards double-digit return on invested capital through our two prong strategy to drive demand in excess of measured capacity growth, and to capture the inherent value of our industry leading scale. The 8% onboard revenue growth achieved this quarter is an affirmation of the inherent power of harnessing our collective efforts as we embrace the fundamental behavioral change of communicating, collaborating and coordinating across our nine world leading brands. The outsize growth in Casino, Bar and communication realized this quarter, in part resulted from best practice sharing. This also marks the second consecutive quarter the Carnival brand outperformed. Despite a competitive Caribbean environment in the first quarter, Carnival Cruise Line enjoyed a mid-single-digit yield improvement. The brand remains on track for a strong year and beyond, the ladder bolted[Phonetic] by a tremendous response by media, travel professionals, and future guests to the unique unveiling of the Carnival Vista.

During the three-day event in New York City, Carnival Cruise Line brought to life the enhanced guest experiences of that brand's most innovative ship ever. Making its debut in 2016 this ship will feature a host of groundbreaking innovations, including the first IMAX theatre SV[Phonetic] and onboard brewery, and sky ride, the first petal flower area with attraction featuring some of the best views ever offered at sea.

The Carnival brand continues to benefit from the roll out of concept 2.0 and it's measurable lift and guest satisfaction, further driving greater guest retention. Additionally, the experiences create stronger customer advocacy, which is far and away the most powerful marketing tool for attracting first time cruise guests. Concerning demand creation overall, we are pleased with the constructive conversations around cruising ignited by our multifaceted campaign well timed during that part of wave