Carnival Cruise Line

Carnival Conquest is shown returning to San Juan on Nov. 30 after Hurricane Maria caused severe damage to Puerto Rico. The cruise line said storms this year caused a pause in Caribbean bookings. Carnival Cruise Line

Skift Take: Carnival Corp. had a good quarter despite the fact that it included two monster hurricanes in key markets. That should bode well for other players in the cruise industry.

— Hannah Sampson

Carnival Corp. pulled off a better-than-expected fourth fiscal quarter, despite hurricanes that damaged key Caribbean ports and scared potential customers from booking trips.

Executives from the world’s largest cruise ship company said bookings were disrupted “for a number of weeks” after Hurricanes Irma and Maria struck in September.

“Since November, we have seen a normalization in the Caribbean booking patterns,” said David Bernstein, Carnival’s chief financial officer, in a call with analysts Tuesday.

As a result, occupancy on North American brands is lagging from the same time a year ago, though bookings were made at higher prices.

President and CEO Arnold Donald said the cruise company — which has sought to avoid slashing prices in order to fill ships when demand dips — had to wait out those several weeks.

“The trick was to stay patient and not overreact to it,” he said. “And our teams did that. We’re seeing the benefit of that now.”

For the fourth quarter, which ended Nov. 30, Carnival Corp. reported revenue of more than $4.2 billion, an increase from more than $3.9 billion from the same period in 2016. Profits in the fourth quarter fell from $609 million last year to $546 million this year, in part due to the impact of the storms. Despite the hit, the results were far higher than Wall Street expected.

Full-year revenues increased by $1.1 billion to $17.5 billion, but profits dipped slightly from $2.8 billion last year to $2.6 billion in 2017. Still, adjusted earnings per share of $3.82 were well higher than Carnival had predicted.

The company expects adjusted earnings per share of $4 to $4.30 for fiscal 2018, though first-quarter earnings are only expected to be in the range of 37 to 41 cents per share, potentially lower than the 38 cents per share reported in the first quarter of 2017.

Analysts wondered if that expectation for the beginning of next year was conservative or a lingering hangover from the hurricane impact. The company’s cruise ships have started returning to some hard-hit areas like San Juan and Grand Turk, and have set dates in January to go back to St. Thomas and St. Maarten.

“So you faced incredible challenges in the fourth quarter,” said Barclays analyst Felicia Hendrix. “You posted bettter-than-expected results. A lot of people are just wondering why we might be seeing a large deceleration in net yield growth in the first quarter.”

Donald said the comparisons were tougher for 2018 and the company is trying to factor in things that could still go wrong. Carnival Corp. owns brands including Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises, Costa Cruises, and Aida Cruises, and ships sail to and from destinations around the world.

“Clearly there’s been some kind of [hurricane] impact, but frankly, the markets have recovered,” he said, adding that it was difficult to identify how many people might be avoiding Caribbean cruises as a result. “I’m sure there are some individuals that are shying away from the Caribbean still despite our efforts and the industry’s efforts.”

Still, executives said they were confident about the coming year.

“We’re in a better booked position year-over-year and feel really good about that,” Donald said. “Looking forward to a great 2018.”

Investors seemed cheered by the results — and what they could mean for other players in the industry. Carnival shares closed at $68.13, up more than 2 percent Tuesday.

“Overall, CCL’s results and outlook should be positive for the industry as a whole and alleviate investor concerns about the impact of the 2017 hurricanes on [first-quarter 2018] Caribbean bookings,” Hendrix wrote in a note to investors.