What is the expected incremental contribution to earnings per share (EPS) from the two new sister ships?
Answer
The press release you referenced does not disclose a specific figure for the incremental contribution to earnings per share (EPS) that the two new Japanese‑built sister ships are expected to generate in the 2027 Japan season.
What the release does tell us
| Item | Details from the announcement |
|---|---|
| Ships | Two Japanese‑built sister vessels (the Diamond‑class ships) will be added to Princess Cruises’ Japan program. |
| Season size | 78 departures across 50 itineraries – the “largest‑ever” Japan deployment for the brand. |
| Geographic focus | All sailings will be in Japan, targeting both domestic and international travelers seeking immersive exploration. |
| Timing | The expanded program is slated for 2027. |
Why EPS isn’t provided
- Financial granularity: Press releases that focus on operational milestones (e.g., new ships, itineraries, departure counts) typically stop short of giving detailed financial projections such as incremental EPS.
- Variable factors: The EPS impact would depend on a range of variables that the release does not disclose, including:
- Anticipated average passenger load factor (capacity utilization).
- Expected average fare per passenger (including cabin mix, onboard spend, and ancillary revenue).
- Operating cost structure for the new ships (crew, fuel, port fees, marketing, etc.).
- Capital‑cost amortization and financing assumptions for the vessels.
- Anticipated average passenger load factor (capacity utilization).
- Company reporting practice: Carnival & Princess Cruises usually embed ship‑level financial expectations in broader earnings guidance (e.g., quarterly earnings releases, SEC filings) rather than in marketing‑oriented announcements.
How analysts typically estimate the EPS contribution of new ships
If you need an estimate for modeling or investment‑analysis purposes, analysts usually follow a “top‑down” approach:
Project incremental revenue
- Capacity: Determine the ship’s passenger‑capacity (e.g., ~1,200‑1,300 guests for a modern Diamond‑class vessel).
- Load factor: Apply an expected average occupancy (e.g., 85‑90 %).
- Average revenue per passenger (ARR): Use historical ARR for Japan itineraries (often in the US$ 1,200‑1,500 range, depending on cabin mix).
- On‑board spend: Add ancillary revenue (food & beverage, excursions, spa, etc.), typically 30‑40 % of ARR.
- Capacity: Determine the ship’s passenger‑capacity (e.g., ~1,200‑1,300 guests for a modern Diamond‑class vessel).
Estimate incremental operating expenses
- Crew & payroll, fuel, port, and marketing costs – often expressed as a percentage of revenue (e.g., 70‑75 % for cruise operators).
Derive incremental operating profit (EBIT)
- Subtract the estimated operating expenses from incremental revenue.
Allocate to EPS
- Net income impact: Adjust EBIT for depreciation, financing interest, and tax (effective tax rate ≈ 25 %).
- Shares outstanding: Divide the incremental net income by the total diluted share count for Princess Cruises (≈ 1.1 billion shares for the combined Carnival & Princess group, though the exact split‑off for Princess alone is disclosed in SEC filings).
- The resulting figure is the incremental EPS attributable to the new ships.
- Net income impact: Adjust EBIT for depreciation, financing interest, and tax (effective tax rate ≈ 25 %).
Illustrative (hypothetical) calculation
| Assumption | Example value |
|---|---|
| Ship capacity | 1,250 guests |
| Departures per year | 39 (half of 78, assuming the other ship mirrors the schedule) |
| Load factor | 88 % |
| ARR (incl. onboard spend) | US $1,350 |
| Revenue per sailing | 1,250 × 0.88 × $1,350 ≈ US $1.47 bn |
| Annual incremental revenue | 1.47 bn × 39 ≈ US $57.3 bn |
| Operating expense ratio | 73 % of revenue |
| EBIT | $57.3 bn × 0.27 ≈ $15.4 bn |
| Tax (25 %) | $3.9 bn |
| Net income | $11.5 bn |
| Diluted shares (Princess‑only) | ~1.1 bn |
| Incremental EPS | $11.5 bn / 1.1 bn ≈ $10.5 per share |
Caveat: The numbers above are purely illustrative* and should not be taken as Princess Cruises’ actual forecast. They simply show the methodology analysts might use when the company eventually releases detailed financial guidance.
Bottom line
- The current press release does not specify an EPS impact for the two new sister ships.
- If you require a quantitative estimate, you’ll need to wait for Princess Cruises (or its parent Carnival & Princess) to issue formal earnings guidance, or you can construct a model using the steps outlined above, inserting the actual ship‑specific data (capacity, fare structure, cost assumptions) once they become publicly available.
If you later obtain any of the missing financial inputs (e.g., expected average fare, onboard spend, cost‑to‑operate, or the company’s projected net‑income contribution for the 2027 Japan season), feel free to share them and I can help refine the EPS estimate accordingly.