Carnival Corp & PLC Report Second Quarter Earnings

[Jason]

Board Authorizes Additional $1 Billion Share Buyback

MIAMI, June 16 /PRNewswire-FirstCall/ -- Carnival Corporation & plc reported net income of $380 million, or $0.46 diluted EPS, on revenues of $2.66 billion for its second quarter ended May 31, 2006. Net income for the second quarter of 2005 was $388 million, or $0.47 diluted EPS, on revenues of $2.52 billion.

Net income for the six months ended May 31, 2006, was $631 million, or $0.77 diluted EPS, on revenues of $5.13 billion, compared to net income of $736 million, or $0.89 diluted EPS, on revenues of $4.91 billion for the same period in 2005.

The company has completed $967 million of its previously authorized $1 billion stock repurchase program and the board of directors has now authorized a second $1 billion stock repurchase program. The repurchase will take place from time to time in open market or privately negotiated transactions in accordance with all applicable laws, rules and regulations. This authorization covers both Carnival Corporation stock traded on the New York Stock Exchange and Carnival plc ordinary shares traded on the London Stock Exchange.

Second quarter 2006 revenues increased 5.8 percent, driven by both a 4.5 percent increase in capacity and an increase in revenue yields (revenue per available lower berth day).

Net and gross revenue yields in current dollars for the second quarter of 2006 increased 1.5 percent compared to the prior year. Net revenue yields as measured on a local currency basis ("constant dollar basis"), which the company believes better reflects underlying revenue performance, increased 2.6 percent over the same period last year, with cruise ticket prices, onboard revenues and occupancies all increasing.

Net cruise costs per available lower berth day ("ALBD") for the second quarter of 2006 increased 4.6 percent compared to the same period last year. On a constant dollar basis, net cruise costs per ALBD increased 5.9 percent from the same period last year. The increase in costs per ALBD was primarily due to a 43 percent increase in fuel prices. Excluding the increased fuel prices, the company's 2006 second quarter net cruise costs per ALBD increased 0.5 percent compared to last year on a constant dollar basis. Gross cruise costs per ALBD increased 3.8 percent.

Carnival Corporation & plc Chairman and CEO Micky Arison said, "Our second quarter earnings were largely in line with our expectations. Both our North American and European cruise brands' yields were strong despite some price pressure on Caribbean sailings. We also did a very good job managing controllable costs, although higher fuel prices reduced second quarter earnings by $74 million, or 9 cents per share, compared to 2005."

Outlook for the Remainder of 2006:

"Based on what we see at this point, we are expecting a solid increase in revenue yields from our European cruise brands in the second half of 2006. Additionally, pricing for our North American brands for European and Alaskan itineraries is ahead of the prior year. However, there remains considerable softness for Caribbean sailings in the second half of 2006. We have responded with more aggressive pricing strategies which have resulted in a solid increase in bookings over the last few weeks," Arison said.

Despite sluggish Caribbean bookings, the company currently expects that net revenue yields will be up 1 to 2 percent (flat in constant dollars) in the second half of 2006 compared to last year. The company continues to expect full year 2006 net revenue yields to increase 1 to 2 percent on both a current and constant dollar basis.

Net cruise costs per ALBD are expected to increase 2 to 3 percent (flat to up 1 percent in constant dollar terms), in the second half of 2006 compared to the corresponding period last year. The company's cost guidance for fuel is based on recent forward prices for fuel of $366 per metric ton for the balance of the year, which is 24 percent or approximately $100 million higher than the last half of 2005. Excluding the anticipated fuel price increase, the company expects net cruise costs per ALBD to be lower by 2 to 3 percent compared to the prior year on a constant dollar basis.

For the third quarter of 2006, the company expects net revenue yields to be up 1 to 2 percent (flat on a constant dollar basis), compared to last year. Net cruise costs per ALBD are expected to be up 5 to 6 percent (up 4 to 5 percent on a constant dollar basis), compared to last year. The increased costs are all attributable to the higher fuel price estimates, which, if realized, will cost the company approximately $66 million in the third quarter, based on recent forward prices for fuel of $364 per metric ton for the third quarter. This cost is 34 percent higher than the average price for fuel for the third quarter of 2005. Excluding the anticipated fuel price increase, the company's cost guidance for the third quarter of 2006 is for net cruise costs per ALBD to be flat compared to the third quarter 2005 on a constant dollar basis. Based on these estimates, the company expects diluted earnings per share for the third quarter of 2006 to be approximately $1.45 to $1.47.

Based on these estimates, the company continues to forecast that diluted earnings per share for the full year 2006 will be approximately $2.65 to $2.75. This guidance is based on currency exchange rates of $1.29 to the euro and $1.88 to sterling.

New Ship Deliveries and Orders:

During the second quarter, the company's Princess Cruises brand took delivery of the new 3,100-passenger Crown Princess, which began offering nine-day Caribbean cruises from the new Brooklyn Cruise Terminal earlier this week.

Continuing its expansion of the European cruise market, on June 12, 2006, the company announced it had ordered two cruise ships for its European brands. The order includes a 2,260-passenger vessel for Costa Cruises and a 2,050-passenger ship for AIDA Cruises, with delivery scheduled for 2009 and 2010, respectively. In addition, Costa has an option for a second 2,260- passenger ship for 2010. Including these new orders, the company's order book now includes 16 new vessels - 10 for its European brands and six for its North American brands.

"This commitment to future expansion, as well as the authorization for another $1 billion share repurchase, demonstrates our confidence in the favorable long-term prospects of our global cruise business. The current order book allows us to grow our global capacity at a measured pace of 7 percent compounded annually over the next four years. We are in a unique position of having strong cash flow to fund our growth initiatives and, to the extent that we have cash remaining, we intend to return those funds to shareholders through dividends and share repurchases," Arison said.

The company has one ship scheduled to enter service in the third quarter 2006, the Costa Concordia, which is slated to launch seven-day Mediterranean cruises from Civitavecchia (Rome) on July 23, 2006.

Also in the third quarter, the company will launch its first Asian-based cruise initiative, Costa Asia, with the newly refurbished Costa Allegra operating five-day voyages from Shanghai, the People's Republic of China, beginning July 3, 2006.

Carnival has scheduled a conference call with analysts at 10 a.m. EDT (15.00 London time) today to discuss its 2006 second quarter earnings. This call can be listened to live, and additional information can be obtained, via Carnival Corporation & plc's Web site at http://www.carnivalcorp.com and http://www.carnivalplc.com.

Carnival Corporation & plc is the largest cruise vacation group in the world, with a portfolio of 13 cruise brands in North America, Europe and Australia, comprised of Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn Cruise Line, Windstar Cruises, AIDA Cruises, Costa Cruises, Cunard Line, Ocean Village, P&O Cruises, Swan Hellenic, P&O Cruises Australia and Costa Asia.

Together, these brands operate 80 ships totaling approximately 141,000 lower berths with 16 new ships scheduled to enter service between July 2006 and spring 2010. Carnival Corporation & plc also operates the leading tour companies in Alaska and the Canadian Yukon, Holland America Tours and Princess Tours. Traded on both the New York and London Stock Exchanges, Carnival Corporation & plc is the only group in the world to be included in both the S&P 500 and the FTSE 100 indices.