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When Carnival Corp. released information about their third-quarter profits this week, there were a lot of very big numbers being bandied about.
We’re talking figures like income of $1.4 billion for the quarter and $5.1 billion cumulative for the year so far.
And honestly, those figures don’t really mean much to anyone who isn’t an investor, right? So let’s take a look at what those numbers mean for the company and more importantly, what they mean for you as a cruiser looking to travel on their ships!
Profits Are Up
Simply put, Carnival is making money. A lot of money. And that is very, very good news indeed for shareholders. It’s estimated that by the time final figures come in for the year, their earnings growth over last year will come in at around a 25 percent increase. “We delivered the strongers quarterly earnings in our company’s history,” said president and CEO Arnold Donald, “affirming our on-going efforts to expand consumer demand in excess of measured capacity increases and leverage our industry-leading scale.”
Translation: The secret to the company’s success has been building more ships and yet managing to not only keep them full, but have more people wanting to sail than there are available sailings. It’s the oldest rule in the business handbook, that of supply and demand.
Bad News For Bargain Hunters
If there’s a downside to all this money flowing in, it’s that consumers aren’t likely to find great deals anytime soon. The company’s release indicated that they’ve already sold more cabins for the first half of 2017 than they had a year previous… and at consistently higher prices. This means they don’t have to worry too much about having the kind of big sales a cruise line might offer if they had an excessive number of cabins available.
A great deal of the money coming in is being poured right back into the company, with some going into the pockets of pleased shareholders. “With cash from operations expected to reach a record $5 billion this year,” Donald shared, “we continue to fund our grown and return cash to shareholders.”
Despite the relatively positive news, Carnival’s stock — which over the past 12 months has sold for between $40.52 and $55.77 a share — remained rooted in the $45 range.
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