BY ARLENE SATCHELL
It?s been a disruptive few weeks for cruise lines as three major hurricanes ? Maria, Irma and Harvey ? forced many to relocate ships or shorten itineraries to avoid the massive storms and bypass severely impacted ports.
On Tuesday, cruise giant Carnival Corp. & PLC said it expects the voyage disruptions from temporary port closures to reduce its fourth-quarter earnings by an estimated 10 cents to 12 cents per share.
But despite the disruptions, strong consumer demand this year and a positive third quarter are expected to mitigate the negative impact on future earnings, company officials said. The conclusion appeared to encourage investors as they pushed the company?s shares up nearly 3 percent to $65.31 in trading Tuesday on the New York Stock Exchange.
Carnival, billed as the world?s largest leisure travel company, reported third-quarter profit of $1.3 billion, or $1.83 a share, for the fiscal period ending Aug. 31. That compared to $1.4 billion, or $1.93 per share posted a year ago.
Revenue in the quarter rose to $5.5 billion from $5.1 billion last year.
?We delivered another consecutive quarter of strong operational improvement and another third quarter adjusted earnings record,? said Arnold Donald, company president and CEO, in a statement. ?Our record results, coupled with strong booking trends, have more than offset the anticipated earnings impact from these weather disruptions.?
Both adjusted earnings per share of $2.29 and $5.5 billion revenue beat analysts estimates, according to Zacks Equity Research. Its analysts had expected earnings of $2.20 per share and revenue of $5.4 billion.
Overall, five Caribbean ports heavily frequented by cruise ships were substantially impacted by the series of hurricanes in the region, Donald said during an analysts call. Those ports are St. Maarten, San Juan, Puerto Rico; St. Thomas, U.S. Virgin Islands, Dominica and Tortola, British Virgin Islands, he said.
The good news, however, is there are more than 40 other ports in the Caribbean and in Mexico that are operational and welcoming cruise ships and their passengers, Donald said.
Carnival?s own port destinations in the region including Amber Cove, Dominican Republic; Cozumel, Mexico; Mahogany Bay, Honduras; Half Moon Cay and Princess Cays, Bahamas, are all operating normally.
?There are so many ports in the Caribbean and the vast majority is fully operational,? Donald said. ?The Caribbean is open for business and is going strong.?
Still, in the weeks following the hurricanes, there?s been a slowdown in Caribbean bookings, but that?s expected to pick up again as word spreads that most of the region is unaffected, said David Bernstein, chief financial officer. ?There have been some quiet days, but we?re very well-booked for the fourth-quarter.?
Donald said the company had not seen a lot of Caribbean cancellations ? only about 1 percent? so things for now were ?positive.?
One example of a quick rebound is Key West, which had already begun to welcome cruise ships again, ?so things are righting pretty quickly,? Donald said.
For the fourth quarter, Carnival is forecasting adjusted earnings per share in the range of 44 to 50 cents, compared with 67 cents a share in the 2016 period.
?With disruptions costing the company 0.4 percent in yields and 0.3 percent in costs in the fourth quarter, we recognize these expenses could have been significantly larger in magnitude and could have had an impact of a longer duration,? Morningstar analyst Jaime Katz wrote in an investors note Tuesday.
For full-year 2017, the cruise company said it?s now expecting adjusted earnings per share in the range of $3.64 to $3.70, compared with its June guidance of $3.60 to $3.70.
Looking ahead, Carnival said cumulative bookings for the first half of 2018 are well ahead of the prior year on both price and occupancy. Since June, booking volumes for the first half of 2018 were running ahead of last year at higher prices.
The cruise company?s nine brands are Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, Cunard, Costa Cruises, AIDA Cruises, P&O Cruises (U.K.) and P&O Cruises (Australia).