CCL - Earnings call transcript Q3 2018 | Carnival Corporation & plc

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Arnold Donald

Good morning, everyone. And welcome to our Third Quarter 2018 Earnings Conference Call. I'm Arnold Donald, President and CEO of Carnival Corporation & Plc. Today, I'm joined by our Chairman, Micky Arison; as well as David Bernstein, Chief Financial Officer, and Beth Roberts, our Senior Vice President, Investor Relations.

Before I begin, please note that some of our remarks on this call will be forward-looking. you cautionary refer press in must release. I to statement the today’s Therefore, record billion history earning X.X delivered third-quarter We a $X.X highest performance company. billion, quarterly on in our the of the of revenues earnings breaking of of record June $X.XX last the $X.XX result share higher $X.XX were Adjusted than of year's guidance. above and midpoint per bringing to again, operating performance compared us for a by time per compared our prior overcame share against to drag Once year. further our to the the quarter guidance, June this $X.XX fueling currency total $X.XX the moving of Strong to execution a range will guidance improvement than drag deliver $X.XX. to to guidance, us $X.XX June of currency, bottom-line a overcoming compared full-year to further to year fueling $X.XX further $X.XX our to $X.XX $X.XX from by this from more $X.XX a the our enabling increase to of support testament members above of are professionals and day across results enthusiastically a thousands who tens of so company travel brands. of fellow team and globally our these the who go testament to course very every passionate the our effort Again, also beyond my discussed sustainability efforts as strong schedule ahead in note, our members to shore. us our carbon goals emissions sustainability since since our we on combined nine establishing from this plus unit report our it annual XXXX and XXX,XXX achieve report, leaving of additional to to the three years appropriate commitment reduction our recently to goal, another target ship surpassing track XX% to published achieve in sustainability, out also a the sustainability furthers is team point On quarter, released of helping

Papenburg the light Guetta The people reinforces cruise at spectacular leading quarter sold-out is XX,XXX that was create our Grammy-winning how and more and exclusively efficient. show world the by for significantly open generation Meyer of ship was in in on our air attended next industry event Germany. by designed David AIDAnova demand example celebrating Germany naming our of cruise our AIDAnova line presence and another than thousands closed a the shipyard producer guests brands. peer. viewed also more also by of leading and DJ more, Werft for and concert online at another positive we closest We This thousands our German note, twice

is and and In AIDA liquefied fact, efforts more the fuel cruise natural XX% yet be fleet than well by as she gas, first world's environmental cost our to average, for history bodes at which XX% the further sea over of in to unit stewardship. efficient ship efficient returns AIDAnova ever port which in over is makes the powered many future. more another

total Cruise both quarter, the Lines' Carnival the contracts demand blimp Carnival All U.S. quarter this and ongoing next options. of efforts a critical to Homeport in industry-leading campaign included The be its by XXXX, completed Carnival by showcased XX generation our our bringing number customized airship. the port ships Princess Advantage raise by by awareness In cities to on order to of Lines launching four visited fleet process, powered of for to we fully powered two ships XXXX create During more for delivered LNG LNG brands number brands XX. Cruise highlighted ships. a past for embarkation

with with the had Club. experience premium featuring to Nieuw campaign Oprah This their godmother year a and XX% have of just complementing contemporary publicized in Cruises a Onboard Lincoln name its Carnival and its media a ago. XX O X also of the around In sale. X In Winfrey, newest B.B. received our welcome Walk Shark Fun Center a third O'Neal Officer, Stage, King's hosted volumes Magazine Discovery ship social fact, four Carnival topped create with in by players a year. brand bringing Rock live this total, and Blues a anniversary partnered for ships to Stone girls its brand announced onboard Heat. billion more Chief XXX classic million Fun brand calls Cuba. call with Seabourn partnership nearly well Also It record Britannia joining Miami Statendam, Iona to and offered special Choose garnered Seabourn Cuba getaway the media demand campaign, Rolling first Horizon America its and Stephen departures impressions cruise strong on of in approval In be Summer day Miami begin month-long back week, to done featuring media ship's of Iona sailing with revealed UK last Week. Billboard years ship to Shark Shaquille to from came of building America very opened events Mulhern. personality the Music luxury year, was America. on the we than P&O Cuba Stone five personally airship impressions. double, XXth has Holland Room, to Cuba, partnership sales to next ports TV the this is next Carnival's achieving event also strong to will rock UK, of homeport. Channel new Princess Holland to Rolling innovative the new Line Holland join its

been strong Week third For successful Fashion Cunard, very demand. just program. the Transatlantic driving new a global completed They deployments have

a XXth time will festival mentions. plus of summer, also for anniversary Italy, joined first return booking media In Genoa, highly in XX been years, Alaska Cunard and Next publicized millions attendees celebrated XXX,XXX very strong. has the which hometown with to in Costa its

industry-leading our efforts putting to quarter, innovation this past again made progress scale also We our work. meaningful on

milestone among our six with this major revenue experiencing Ocean having a onboard our of highest particularly As full rollout the XXXX Caribbean will and you of in of Medallion beyond. in ramp-up Ocean We second Princess drive the Guest to in cruising. our quarter know, guest continue incremental to completed Princess the quarter, this for the class we Caribbean of are up YODA, our scores brands, tool onboard fleet. management are and half platform, measured achieved ship which satisfaction state-of-the-art all period substantially our the revenue first

We ourselves across while more toward expanding continue make features add to Princess pacing deployment refinements fleet. the and

years are we We XXXX strategy closing on results track to in in on fiscal double-digit more full-year achieve on place capital and record based on deliver importantly invested remained the and five ago. put return

also we very and earnings in are XXXX continued growth in excited sustain invested with overtime. journey capital both to usher continue We of our double-digit in returns to as returns

China. new service Esmeralda, Costa Holland European be Costa's ships Guy America's Costa efficient for Princess, beginning Benicia, with first Nieuw enter Statendam, more new four purpose-built year, Next purpose-built our to and will ship for guests

our into next ships a we you same of As than will the deployed across as markets, have is new different ships and as see vastly years. leave secondary well time, brands different sold year. announced source can higher capacity At the the destinations. fleet past markets number four recently We

consistent scale be will XX year, compounded we path net replacing less economies, of to capacity growth, more annually expecting next below continue ships Also, on growth capacity over And through We measured X% efficient are time. free adding with our are ships XXXX. order X.X% more we and which and on are efficient ships, over of capacity execution increasing are spreading growth, have drive regions, going with we add number efficient around geographic our number capacity brands a we to capacity. careful this greater growth that growth earnings of and forward. expect when measured been we and And we where

the brands, continue improvement accelerate look Optimistically, better to our there $XXX we individual repurchases demand million equivalent $X.X in more temporary earnings to billion there billion and our leaving far continue share Carnival fill cumulatively demonstrated, increases industry in of towards we grow will enabled our be us share ships sheet flow us over markets, earnings underpenetrated balance cash which to return providing shift manage in three investing acquiring about ago. and and same to overall program. as our invested nearly allow reliant As earnings, year, growth time, overconcentration repurchase an years increasingly higher are relative share continue June, still and returns. to yield attractive and bringing land-based because proportionally since the of repurchase less this to strong shares the continue achieve capacity both for on just driving alternatives. as working so will in we We $X.X have revenue this value on that capital cost-containment, we program resuming and can total drive to is At capacity are constrained, a the the levels same of rates that will capacity always, higher us year, and to every and and operate aggressively at while we to to to

replenished April and we repurchase share in in the to $X again quarter. repurchases recurring past program up The share dividend our first addition this billion distributions. In is of this course to back year, fact, twice

As to dividend distributions $X.X billion increased April, dividend you also annually. may recall, our bringing we in quality

invested Our of well and industry-leading sheet return continue containing strong cost cash growing scale. remain leveraging creating capital demand while flow positioned to capacity opportunistically combination cash in return earnings to to on and us of excess We through our balance and growing committed leave unwaveringly growth, to measured overtime, a shareholders. our

along with with on to the double-digit turn With XXXX execution strong and continued return successful we efforts many continued has David. demand realized that demonstrated call remain on to in to team industry sustain momentum, beyond. track fundamentals that as Our to the by capital deliver our the already achievements combined to create that, invested confidently I'll the characterize deliver and when

David Bernstein

Thank you, Arnold.

otherwise consider to constant today and all our provide booking stated. and start third XXXX. please begin, some summary be our and an I with items on insights note year up currency, guidance quarter few unless prices other on of Before a XXXX references cost then ticket finish metrics a results will I'll XXXX for revenue, I'll to with full my in update of trends

third EPS As fuel yields, of quarters. the pricing bookings benefited costs net on between two Arnold of timing Atlantic driven $X.XX net quarter was record $X.XX the the $X.XX. from from was things, the midpoint the excluding increased guidance. adjusted above lower by was from both of closing The cost ticket to June improvement This our indicated, due sides primarily which for cruise $X.XX our stronger and on

results Now operating let's third quarter look our versus year. the prior at

Our capacity increased X.X%.

and commonly sales our our X%, more brands segment, ship were up North in earlier the X%, NAA Australia brands were our EA as known while Asia segments commonly and driven known as about approximately two were year. America by Europe Our down

revenue Our were total yields X.X%. up net

ticket number of a revenue by was break the yields let's driven were up two of factors. apart Now net yield. components X.X%. This Net

year's last record our First an for like on increase in NAA in which levels. Alaska than like higher had brands itineraries yields

itineraries $X.XX. Caribbean for in NAA increases third, itineraries summary, as our year adjusted increases another which well the fuel decrease with brands in excluding to with our yields in $X.XX accretive both changes were higher revenue increases solid $X.XX EA offset as onboard a yields X.X% fuel the NAA Atlantic. impact. due of and fall's and last on Europe Second, last third-quarter increased rates as than in of cost was other and by brands for higher in These $X.XX cruise our price repurchase FX the yields sides unfavorable Europe. being in from worth partially our by impact cost In program previous in weather EPS partially both impact offset our guidance Net China. increases in the included X.X% improvement stock And the $X.XX and net costing yield

year guidance. an full to our want on provide you I XXXX Next with update

in range As Arnold our guidance $X.XX. is $X.XX to now said, the of full-year September

continue the strong performance. driven $X.XX We was to have improvement guidance three The by things. our in of September operational essentially midpoint

occurred quarter First, sense further are the third quarter. of benefit an from $X.XX with now $X.XX operational higher we additional flow revenues, fourth for forecasting through improvements from we each the in

expected fuel for each. to the from derivatives quarter. benefit total stronger of $X.XX accretion repurchased year prices, the to relating fuel third, And of start unfavorably the $X.XX in higher impact dollar Second, third by the we and net since $X.XX is the shares

depreciation our increase the costs quarter. items X% from to both to and While of cruise during line amortization. sales guidance favorability accounting for of ALBD the net treatment without fuel Most X.X%. relate the for ship This variances per these was did by and offset in

running volumes Turning capacity significantly Caribbean, to June, offset booking impact. first year. half the first half in the the of the first pre-XXXX the year's we for of almost XX% all last the Since in September prices year's that but ahead for which that running the that this bookings up into advance are represents have Pricing been for XXXX the half are prior lower the programs, isolate of the ahead the prices At volumes more in than are last our was at to comping well prior of last period lower major trends. of by higher If of impacted line. point weather prices are booking of than we time, by XXXX than year year. prior the weather XXXX for at prices in of as have year, significantly booking XXXX double-digit which been first half cumulative ahead of was are at pace, pace

the XXXX. down first drill half of positions let's booked cumulative Now into for the

year prior First, on at for is NAA prices. program occupancy lower the of brand, the our Caribbean ahead

of ahead occupancy year the at For is all higher prices. other prior deployments,

the EA at program And while itineraries occupancy items is our Caribbean few finally, European capacity occupancy are ahead forecasting prior XXXX, a at line. of that are consider the prices, the increase is ahead for for X.X%. we brand, of lower other on the Second, in year prices to

modeling September $X.XX. and net derivatives by currency prices fuel impact share. Higher unfavorably using FX the stronger guidance dollar fuel higher XXXX price would of rates, prices will cost fuel you who fuel those XXXX while per unfavorable the $X.XX, For and impact $X.XX is an about of of are

many it between ALBD the and yet the early, fuel increase while to net with calculation for XXXX FX costs first of cruise our Given evenly is impact price be constant per expectation all timing and decisions made, of slightly is quarter, in without is that unfavorable the fuel substantially second split the currency. will

solid billion increase cruise quarter first and the which we will primarily guidance optimize current somewhat strong However, XXXX the Based about Booking full be We fourth with comparison. first booking to yield expect currently for net revenue growth billion increase. the next half versus we than believe yield on to trends driven be strengthening, higher do and be yield for net cost revenue second less X.XX prior XXXX. to XXXX, the expect management year are net for depreciation X.XX quarter expected due net expect year that up in year we decisions than yield revenue growth. in been very by XXXX strong the for the have trends, will of

we XXXX believe due weighted call well we in continued the And in second half year, the impact the now, half. the growth currency positioned full the for For to back turn to of are first Arnold. earnings I'll over year, the fuel and to

Arnold Donald

Operator, line open questions. for you, Thank David. the please

Operator

of We question the get to Please Instructions] Steve from Stifel. go [Operator Wieczynski ahead. the first on will our line line from

Steve Wieczynski

A couple with here of questions you.

about versus since I mostly activity. the commentary Caribbean the that somewhat the So, your is because upon pricing I and talked first the have guess part are mentioned of there comparisons around to you booking load of June, half on the confusing which September, hurricane you and since easy know what of seen both you related

So guess What clear there but when world detail helped trying kind look is, you markets, makes I'm and maybe question that a of bit picture the give any Caribbean? the get a excluding -- picture I to is David more little to us the and what said, sense? a David of what get I here little like-for-like of kind versus like rest think XXXX the if here us bit, way looks a a getting of little was better of maybe at

Arnold Donald

brands do on and ships, do new comment influence think achieve of have a there bookings have on especially periods. in but nine guys a yields serving the brands that also booking we yield. markets. do now remember to premium I and the take yields, range differentiated overall just opportunity a you I'll broader We Yes, I'll to is And which across

mix translate benefit So doesn't yield into while necessarily yields. a benefit a you within a that brand to overall get

is you new premium, averaging the new the give corporate a below corporate on below ship still The overall but an yields corporate ship negatively that is are the brand yield brings a brand premium better fleet to for on has yield, does impacted. but that So and average. example

if earnings growing still even because more yields essentially are making we're we are earnings. by held mix, average While back

to create brands course, the earnings ship all ships of and drive Now are and yield and are we every demand more receiving an as efficient. new across we benefit

booking you plethora So, to trends, earnings there of especially when we and yield. And at focus a comparisons. looking more at things on have when consider, yield, year-to-year you look returns is than

talked rest comment occupancy industry up. the Carnival And Caribbean in concerned capacity capacity, packages capacity both our brands next for on but with curve, are highest just maybe charters, has flavor year in board increase of versus in own has including the prices because changes that later to So is collectively ticket which some brand the which brand Caribbean. Itinerary onboard is people Caribbean curve, optimizing I the relative capacity bookings only its onboard. brands David demand, in management yield, know let -- booking demand across in other little each give around and world, of destination just bookings year duration, and I'll us, the for but reason Caribbean year changes round. about. booking which of is is of mix on among the up price is value than impact on like yields the comes on a and you are round of ticket the timing capacity Carnival Western increase guests the when And I in

of yields. ultimately less are capacity, us, is, obviously the in obviously, it’s are are for the going a focused fact with we driving moving growing look And we absolute to earnings and so when But reliant a focus yield composite on lot and yield movement. end, on still we you parts, a different at of on

So about and go with the talk little rest a ahead bit that, David, the world. of

David Bernstein

I remarks the except programs I in major were I of my terms prepared the terms booking pricing up for Caribbean. terms clear was quarter all in did mean the of trends, of very in in

Now, the is everybody about to period I talking the XXXX. bookings the sure booking want first, that of understands for one things is make first half the we’re is

in June, we and to in were period, you we're booking down. prices during that were Caribbean volumes June, say Caribbean. in the back like just see were 'XX; percentage, go XX% about line So represents the and volumes XX% talking the in prices of if bigger we only back in did had weighted-average. about said XX% we the now yes, of back we represented half And what of But the talking Caribbean XXXX, bookings the almost as back were the or half you a total we

impact, Now, issues September the about booking on we we and booking now have booking volumes the weather Caribbean, talked the prices lapped higher. were the having in the

year And so, the comparisons are different weather was impacted. last

so as positive booked we're of markets the we a increase in in we the booking we of seeing true you When prices. look do XXXX, is forward. next look year, for the prior of you program occupancy Alaska, ahead and great at for year. on both the position And these higher when same capacity bit And year increase full mean we're have our where, quite trends, or European at X% Europe better at and lot a there, at X.X% you and prices move thing capacity increase and higher the capacity I Alaska, look year we're there's full much a the at ahead are

and in said solid very us as expect that I revenue improvement gave notes that's conclusion, in my we're XXXX. yield So, confident what the we

Steve Wieczynski

full the relative more yield the how not used, you little I about, it you in for first And a half about good adjective the look bit year back you, of you’re answer growth, year year thanks your I’m to to talked you going last guys. you of half lot about are got that’s commentary David but, a color Okay kind at sure quick healthy and question, one can't of I being talked very 'XX. think the next you weaker exact long remember of but strong. year being talk some when

similar we this or now, to going year able XX still sit yields of and I you to is year? So that you when from to -- do possible position you're months back could be full grow in can what do guess what you'll the it a

Arnold Donald

on We’re we and certainly insight. just but hard know point, what going that. to you focused or you every At next trying very this on. guidance we’re directional have to do clearly that’s giving year just guys David. not work for working anything we’re that brand And to give some is

David Bernstein

very comparisons half the of that for that things of strong is, first prior year one we're about had the the year talking comparisons. So, from fact next we very,

know the from of we very of The since the in in first well booked growth last yield year Caribbean nearly the weather it had revenue XXXX, You minimal deployment fall it impact our X%. half of in net so was disruptions. when, and the achieved quarter was nearly quarter, first

and So yields a the did first of the in have comparison quarter nicely headwind XXXX. higher we in that's

And achieved So, challenging we and significant in with in again up was the that and growth X% second revenue more quarters offset we expecting a other in the net programs. quarter, Caribbean. the with sequential at by were fourth are increases the quarter when that and in yields Caribbean nearly X% that's than quarter, you and both improvement of that in yield look all the first capacity Caribbean was in yield

half on But said, not more the you yield those in of revenue will us solid color and that the improvement lapping best in XXXX the do expect booking gave GAAP first the improvements you of until as we yield half net year. we impact and Caribbean guess our second a December. for great So quarter, comparisons XXXX challenging for and the with first I give was

Operator

Please of Bernstein to Research. our on David ahead. get line from Beckel next very go Thank the We'll line you question much. with the

David Beckel

is at the say still, concern Caribbean words, of good and to be So, improving? on fair quarter? it they are were that least the quarter pricing as of the the but in terms pricing it much things since last would Caribbean in better around are other or than conditions In like last focused the demand sounds

David Bernstein

the are we saying we Yes, of keep improving the sequential we're it's event from in not yield see lap yields timing I see booking from the improving that way improving, going quarter in and and trend book to I perspective, yields comparisons each that, actual we a quarter. as the we year's bookings overall see don't last a think lapping a we're achieving will and until said until an given just the second a sequential we September trends the perspective

Arnold Donald

have in the Carnival mentioned information. And in which season, the the of even as see already up about don’t talk has up then or mentioned the a you But for of occupancy guidance like strength brands is mix higher lots in brand Caribbean, yields. of example evidence and typically up next we is in terms and a in capacity variables anything by et high increase of and Caribbean, but for is Western brand region yield I've lot cetera, already. And it I Caribbean brand largest give the of or in brand we other capacity so involved when we

and strong Carnival had is Caribbean the So, outperform. continues record to years there we've

look we're do and number We We I Caribbean overall strong. there earnings other have the articulate some grow. but average they we our of growing tried lot making a a way are is as continue dynamics certain to have difficult earlier, that to comparisons, yield going will but are

David Beckel

point quick as that and And a mix factors. follow-up non-comparable you to great make about did a

itinerary most would strip You've of on factors half? mix of first were and obvious already for Caribbean the you position some Carnival how the look If brand the out, and to obviously. commented

Beth Roberts

Caribbean just the the of sequential bigger say and end we the at half, months, would in part booking base the expecting Caribbean are in last a three more improvement are of the in first in the day. yield it's because we I

three that in last seeing business is are concentration you a booked. greater what months Caribbean So, of

Operator

And proceed Shojaian we ahead. with line Research. Jared the our go line will the question from Please next to Wolfe on of

Jared Shojaian

that to 'XX guidance. want first back yield I So half go to

Your is for ahead are prices line, if that book should would think less than that on implying guidance the you are I goes in as position time better right fourth X% about at you quarter. mean planning are X% get or the I now,

sort are from have So me -- not improve with to there the thinking Or assuming you you books sort of of comparisons? you starting versus just really that? you of how and on takes can you any that understand puts easier benefit what right the to just guiding pricing get help and about now really sort are

David Bernstein

quarter So to basically, half of look first second and this for the when the point you XX%. is at quarter year, have at at XX% ranges booked said historical the of given and XX% the are -- the first we we for where always XX% to

the was of those higher we it the ranges. said, on books what's So end

in the are half with half for over booked is that as of we So is the line. first essentially half year, prices we and said

like expectation we be line and part the of manage we and we onboard revenue net manage guiding passengers between said than to business fourth that something will move yield. than the optimize we year we business the coming that also the we both the are be less total what to a revenue forward onboard. point the is remember, as So for looking in that will prior better will at the is yield are improvement that where, bookings to is, get the not yield factor but and item There the the to quarter that’s one get

whole goes guidance. the so, into factor the as And that part that’s of

Jared Shojaian

bookings American the now North and I trends just your sourcing from right seeing now. the talk seems you Or about sourcing really some it with versus you similar? foreign is sourcing you're mean Are Can right sourcing? consumer U.S. now? for versus better is fairly of seeing foreign right differences strong North pricing American like it

David Bernstein

strength book around globe sides We in various we in are seeing Caribbean today. where I of the segments. other Atlantic for all comment but side of the both solid of terms our good the of itineraries On both similar we around in sourcing. on the see both all of in for terms markets terms the the strong gave bookings good trends in in brands of

Jared Shojaian

One last be year-over-year expecting you yields for it correct? just second a on than half quick clarification 'XX that the basis better to are guys like first half. sounds Is me,

David Bernstein

did December. in booked net Yes, will We you year not say for growth We're solid on this give little we the yield detail said very the we year more that. just and revenue point. full at

Operator

line next the Morningstar the question go Katz with ahead. And of on our Research. we line Jaime from will to Go

Jaime Katz

I'm if curious that a China, is and trend changes are have you one periods? I'm any recent curious, the commentary there too any there seen given exiting have market. in competitors on was spoken than your of little if you

Arnold Donald

would that the just keep of all I first of percent is China a in small mind say total.

we So, capacity always less going it creates an in. forward that. operate in easier with Clearly start China to environment with

going to as be going purpose have are built Costa for Costa's Benicia, China. We I first ship to mentioned which is

be year. year, have the to of we look ahead year, next So first the half us. capacity more in China capacity continues in the But to for the accretive half less we as of second

accretive. our But not all the is and along relatively it are with right had still policy accretive, part is move ships there is of if continue as well overall long same they doing we total. it’s small out will that we We we now because have as accretive them

David Bernstein

this yield it’s I my and quarter, think both say the of increase that China. to in noted the fair in quarter increase last I part ticket in remarks prepared last to due was net And

travel with and in in things, the been all we've distributors the as a So, we and making the quarters, last all been we've doing some have seen trends China. changes favorable of result two the

very feel about direction. the market its and we So, good

Jaime Katz

a underserved still significant Galveston was increases? not to guys then, about And little feel can you there. support that U.S. maybe set do for like a capacity been you markets still, more there the opportunity oncoming Is have penetrate fleet back to ship demand you're guys the is you there some changes obviously year with elaborate bit with that making, ship moving Beach you’re Long Carnival a next revisiting into that your are and

Arnold Donald

one based to market other in strengths able more Clearly, is a brands the our, the of the U.S. market. access as brand of drive being the Carnival and

believe in that’s where they And so that U.S. for up all the points U.S. successful, we're XX brand ongoing for see is approach to been almost up different Carnival proven an

on And and an for them part look itineraries guests our North to ongoing extent want for and access Carnival American we continue ships effective for go what to strategy it's some brands. easier so that to to get the but to about giving

David Bernstein

to not an people also a see market the the it’s ships we've a ship, overall in larger us and part And it's to opportunity go time. move give normal that different engaged develops as market over unusual to on into strategy of so

Jaime Katz

with X.X% growth correct? ships year the note is next housekeeping capacity the then And the out, coming four

David Bernstein

Correct.

Operator

question on will to And Farley line next the the ahead. our get line Go we from with UBS. of Robin

Robin Farley

what of of XXX Just points basis your like and going for year, have consistently last two yield years. guidance back or and the to this growth to is three sort year next you guys ahead guidance XXX in think I your yield initial very delivered

when booked yield think in QX hurricane it, next how the words would tell mostly comps the all what but not September booked that, kind typically not less showing forward, half opportunity price in of So and booked? your just can post the sounds much know given year, is you other before would be kind right maybe I in fully words how us it are conservatism second comments, the of benefit volume for of if the about September like giving surprisingly from higher growth guidance we higher the the you things comp, typically, appreciating then and much the of not In since and year, started of most of and September based September think would your in with other be but the second half on QX, would QX, weeks higher QX just for half QX at be because be exposure what would in other that that seeing growth be credit second and rate most that you of because did would the from comps reasonable the thing the that something the just growth both again And second the to of you've than of isn't initial might that have two be are the least, think that half then of Arnold say your to forward? ago? weighted guidance, full-year I X.X% in easier less sort of said, booked you then like in it booked of kind year of also simply top this will be

Arnold Donald

occurring terms to next second lot of on because year, wave a you, season that's of yields impact than advance currently the morning half much in cetera. of also first it the so seeing, and tend good Robin, a earnings of we were my spending first because half standpoint part the currency money doing year et in that to of all the more comments in is spend we from that's fuel of are of the

back And the of so, than half. in the first be our weighted cost more would year half the

of that, we periods years management. also the couple So, occupancy multiple I is, out feel tone comment. hear pricing, risk a and concerned we've further, and is of on But challenge were the because and remember David is yield yield is there the is this when Caribbean lower curve lot just and a cetera. before where comments, in the the we I had it that quick couple things, people on have ago Caribbean about managing ahead fine, and turned quick been big reality think booking real of just very that was a And or good been et people has strengthening

that a out growing picture lot that's and overall of say time to for have And us when on you guests itself is those people Carnival what a propensity for earnings. attract though who are our to and et charters, of lower it's other will give have our what from revenues as we the than when on well board over of you and fleet will terms in yield mix So, you ships I've brand your have cetera. things of board if most All get time on. mentioned, average are a yield impact yield weighted some even coming us the example we as stay people wash correct contribute in things you higher that brands mix tends to

there we and struggle don’t on intend a details we've we're building want record there really So, we the is create we on there growing that been our that were to even isn't, to management in focused our with deliver. but image strength they is things do, yield because growth Caribbean earnings comparisons. we any delivering and have in But then

David. ahead, go So

David Bernstein

purposes before So second before, this in the at at first we're the of I to to bookings, alluded XX% we've we second first on of high the think XX%, illustrating historical for to and quarter go end to terms the I left XX% range, quarter the left time quarter. there use still on quarter number go just the exact so the XX% XX% historically to and XX%. the said And is

really best there that. and clearly, So, happen. we but in Robin, in also said the will bookings is they is quarters before guess always isn't half you there as on three first the our advanced both what line we have The on is we while are the ticket and opportunity for onboard, total think more second, at give

of point. this we our for giving the year half first best at guess So, you are the

Robin Farley

my more concern But the the been have Caribbean about a it's suggesting I you certainly… was and turn by that suggesting I And way that conservative. wasn’t really

Arnold Donald

Robin, thank you. wasn’t I about speaking you actually

Robin Farley

the majority double digits of September volume take place and period So of where in second just this will higher… this pricing up bottom is half post line bookings

Arnold Donald

Yes.

David Bernstein

Absolutely.

Arnold Donald

Yes, absolutely.

Robin Farley

think it second I'm half to just seems throwing are out reasonable not which you growth So, saying that that there.

thank Okay, you.

Arnold Donald

Thank you, Robin.

Operator

to on of the go the Hendrix And we from Barclays. next ahead. go question will line Felicia line our with Please

Felicia Hendrix

very you in the think volumes point to have the in half on I not color already for thank in ahead of the emphasizing the segment reflective occupancy for nothing have wrong the is June booking that’s in Caribbean the simply been us same talked David mean particularly running Caribbean, when seeing and lot a first so NAA have given the since the a reiterate release and EA, call guys lower of first you correct? talking but the for of and really there right, this, gave been about function You helpful that the half you the at have that. of brand, color is that September, significantly. prices just in you and market which earlier what that’s been about I improvement kind you

David Bernstein

the fact comparison the comparison. so not reflects the year prior in impacted of that correct, that Yes, was weather and reflective it's

Felicia Hendrix

how an -- the Okay and the the when then are Was for great, and clarify half? despite super you and occupancy that could was that talked year? Western in significant just Or was clear, you capacity. seeing Caribbean the Arnold for first about increase full you that yield just in increase

Arnold Donald

both. probably for both It's This for Felicia

Beth Roberts

the on books Business year first is half. the the we have for full

Arnold Donald

Yes, exactly.

Felicia Hendrix

your to not look Western which are particularly and the Caribbean the seeing Caribbean But in point in and people in about was capacity that just increases is concerned there?

Arnold Donald

and Caribbean have the we're near capacity increase on overall Western in digit in we yields. Yes, double up and occupancy

Felicia Hendrix

how release lower than 'XX language are for quarter to guidance. of the be yields fourth and just the final, then half in talking about first they the And going

You X.X%. guys have to provided a range of X.X%

ranges into company investment I given. tends the of when community midpoint to think the hone has

were you us bogey to like a give parameters? you comment the about that end the when gave the So, high fair just low or is that midpoint some or thinking end

David Bernstein

It's I than fourth quarter. giving all the guidance today had less pick would so guidance fair numbers it a this I the that would be give be guidance to say in a if range three was I whether specific that midpoint to -- or guidance the would

less to your trying midpoint the exact an and an directionally early. answer not just would too X% to the at it giving to point. be We exact give guidance guidance give. we because early are would than it’s of midpoint this it’s question But We would number

Arnold Donald

want a things that, just of capacity relative proportions brands. including different lot are I again, capacity to of emphasize Felicia, and from driving

and achieving the like so market down on a But the brands but many of yield destination and is and it's so are are have for that overall gets growing weighted there focused significant fleet actually for that So in one it we we’re especially Caribbean the is improvement while more whatever capacity average average. can the dollars, increase it an because still brand, earning variables. pull that’s are yield that constantly the are below earnings

Felicia Hendrix

unfortunately appreciated all looking even well of so. us, not, who've million and just we’re been and years or all a on Yes, yield for focused cruise X at

Arnold Donald

Right.

Felicia Hendrix

the yes, or year mix, kind But pretty out of think since that the so. spelled I past mix your get has no over one everybody clearly competitors issues especially

the fourth just then to lower of David, but are lower? and kind guidance, you quarter say when get or not than significantly Okay so, about cute talking lower we

David Bernstein

our it's We more a in have and to verify, that's And December, do. of you that still work will guess. we give best to on lot about color

Operator

Please get to you our next question ahead. from much. Wells the Tim line Thank I very Fargo of Securities. will on go the Conder line with

Tim Conder

where, that have overall then Thank you. we If much the potentially see point booking point commentary. industry always to obviously to Couple part back loading of the questions was whereby further on booking the maximum of "Hey, How expand. and too curve this trade-off pricing restrain Do the look to upside"? of continues you base in impacted the expanded obviously expanding didn't we early curve for maybe feel of up the as of August, booking that And much now saying to a the June maybe view pricing this because give booking next and curve, we’re by year? finally certainly into or we issue yourself we're curve. Caribbean booking Caribbean tended going at the that impacted the and you a you’re the

Arnold Donald

there's curve variables brand, there. pursuit by of destination, zillion I by the market mean in that varies always booking a and optimized obviously, that source earnings it like maximizes, by We’re

out focused of further management And price experts. absolute about of curve not that's booking our kind the singularly and yield the of how it in pursuit all we're think Yoda not so, we with moving collaboration

for to the and out just variables all comes it one each based really trying it optimize are frankly and there. ship out each We the on way itinerary each comes

David Bernstein

end sail optimize way we I characterize and characterize game. the when along ship bookings good is really decisions capture making try is the you the Arnold base we're optimize pricing it way to loading, more the and the the And describing revenue to to

that's the anything and goal other maximum really isn't And revenue so yield. than goal the

Tim Conder

to to the now I we've years. everyone curve guess few last [John] seen way booking of the sort for maybe linked and again ask another industry

more down you to you more one price? trying have or industry industry that the to think you and would fall of If perspective fence the potentially expect of to some point that on the further harvest would length let’s side an is it the take in is

Arnold Donald

and think that inch I it have we that the the more we're There is answer than curve it is there some booking booking trying the further curve that our out that get just you booking so a earnings. the more are to the obviously is the create out curves the just that's maximize we to even so better to along would are to more but theoretical demand optimize of likely inch demand likely somewhat more I better job for kind think you bit. approaching before, at would yields we along really creating the limits see is now, and

David Bernstein

by cabin the optimize to overtime. XXXX, there's way to are trying the the the new yield. cruise-by-cruise, This like and know delivered maximize lengths you booking up. big decisions just are it of and overtime we of this it you one-off as picture and rolls got we a also a it's affecting included, this, trying it's that give Iona, level. booking to the we're Cruise's isn't the yield make of decisions it category make But just ship then there P&O doesn’t And get different lot started to micro-level, the everything at occur in are decisions just or are all other very and until things so and that's goal been like itinerary variables if an And which crazy all and cabin we made one category micro a good overriding revenue

Tim Conder

the the plus China China for sourcing how Australia industry I China that. that in year folding Australia while global percentage some piece maybe and and sourcing Okay, you gentlemen relative in here capacity and great I looking? that lastly Australia improving, the is and then to is how of market yet the a asking your has appreciate the capacity been perspective seasonal see that we shifting thank from a industry to last with that's in your again of as guess for

Arnold Donald

have it's growing, a year number China. seen relatively we portion, it country and the increase. Well, plus if on the over to growing given volume, the but percent that the overtime, of of the leave XX it guests, still domestic small obviously to a sourcing small expect almost travel million number, of but largest fly/cruise have mean total definitely fact time It world the the in in you you China so we like terms of and sailing relatively is market that it's and we size the increase to outbound is

Chinese also You going in Australia other and mentioned and Alaska Australia, too. guests obviously, we've in seen the increase but to ships, getting places on we've seen

kind there we reflecting of expansion, there brands Australia a announced that for for to of other in potential made sustain that certainly good industry brand, again comment, commitment also continues in that. terminal up and which the to be in strong very in performance cruise with we P&O that So will but overall are our our market us terms growth Australia Brisbane we have a the way a be and

and into their also that that But CSSC significant as domestic And joint market proud we and today. joint China be towards going year the of as market China is a capacity market fly/cruise are significant it already still through sailing as good we long-term the to plan, is ultimately middle delta to to five to we market move could we overtime the market look our all venture ultimately to we've a been be. as very is relationship it's beyond our within large taking venture is which the over expect time. build on be So that help going cruise at announced continue putting XXXX and be and sustainable ships global with but

David Bernstein

we us year, of fly/cruise as Australia we last all XXXX And us. some Europe P&O brand. our ships, a down announced the Australia about be capacity of Australia, for have addition to a in and out Australia, XXXX going will ships strategic and of and a the us so realignment business are brands the P&O the talked market Australia, for 'XX to in for we seeing you sold but in of know we to market It’s great other for It and great of globe the well. Alaska many places lot is for over have fly/cruise

Operator

the to of line Infinity we Research. our go the on with line And Please next Assia will from ahead. Georgieva go question

Assia Georgieva

really anyone affected to I again so was that impact happy the just think Could I wanted -- haven’t QX I new the the still last mentioned numbers. post we question, very the back QX, bookings but felt I in with to go don’t hurricanes. year QX of

from of comps. QX So a will more beneficiary easing be those

last in to seem a we quite addition year. QX, of In capacity have bit

for lot of for improvement room still is current there We still? that in in the yields QX. say are mentioned again flat And QX to see your as to with see strength strong to QX? upside going especially fair it down is So, strengthening expectations possibly sequential not or you

David Bernstein

produce said do and optimize and I do bookings our said, for hard best second we as to we want we is the So, optimize the that mean first gave and our you and quarter, already before don’t you directional results of guidance and best I yet on some a for our there to to to Company. half great best what lot and to will and I repeat very gave I work come we the first guess

Assia Georgieva

could quick coming Horizon to and QX et question, Ovation, that cetera? try. we Carnival David, QX for we have a capacity and I have Seabourn given get figures And housekeeping in the

Beth Roberts

The X.X, gets QX which for capacity in QX X.X, year. is QX X.X, up you X.X is up to QX X.X the in and back capacity is the is

Arnold Donald

And more operator, we time have question. one for

Operator

proceed the day Morgan Rollo Certainly, Jamie our from the line we will Please for ahead. with with Stanley. with go question final

Jamie Rollo

question. my taking thanks Great, for

and add and of could growth you the you continue or see better been getting talking less much just perhaps that, if said, think this from us about so ships have direction some some can Princess, recent on think And quarter the give if sequential we in growth about to Carnival cadence. bigger to I your through comp, numbers more earnings usual. you're Arnold sort said helpful driving year selling yields that you I and yield I than you’re orders for by

is that off sort you versus that can whether yield growth So sort to going pace trade of of which forward? means sort earnings of level yield and of expect

Arnold Donald

still nine below if so corporate improve have earnings we’re get but there and versus repeat yield, have is evolves can bit. I will first, the I The and take in earnings. the we’re in second again will to bring a for process brands we a average because bottom a brand on earnings have so, we brand little and yield part mix, sure. to fleet absolutely average you I line as have down But yield, and mentioned the growing that focused we doing the

a you that’s the is you follow earnings it. on know because And huge And mix guys the strategically clearly rest, so follow I we’re for obviously. us have so yield focused to and of even but can’t with and yield part

all know bookings the particular have can with other And at you the sail, onboard have our yield have itself considerations. people period strategy then that variables won't booking that because mix. until actual, yields different along you you looking charters look those you for ticket they onboard these have pricing and our of mix in up what show mentioned a during I affect versus things management like between all We’re actually

but next overall, yield earnings, year into and and would our trends we strong for have strengthening been focused that and and absolutely strong of management play in are all have comes booking we on strengthening terms yield of are those been So Go were weren't guidance for directional to just around you do. again they look summary color first input the ahead, some way trying say give David. be might things just giving half. and the to thing the why with we We the are guys

David Bernstein

much don't competitive the them were the and second that on Caribbean as give for said the and percentages expect fourth quarter. Caribbean first but reasons, the be third have sequential detail brand ever said don't we down for down by improvement expect market in we And quarter quarter, and that we yields we we by

trend we impact year-over-year we is on a basis through overall are improving So as seeing prior the year. an move the from weather

Jamie Rollo

it that at looking by months two fair it's at price, that was simply is above the looking where Caribbean it to say years way? So ago

David Bernstein

I you at actually don’t to have, actually to but two detail. back answer question, that have I that get Paul. all have can the I ago look years to

Arnold Donald

same Bu it's last period certainly looking better than year.

Arnold Donald

it. much. you. we really Hey, you look look deliver everyone, call. thank to so And and forward appreciate We next forward continue to we our to Thank

Carnival Corporation & plc (CCL) 27 Sep 182018 Q3 Earnings call transcript