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Two segments make up 98% of Carnival Corporation’s revenue

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Jan. 14 2015, Updated 4:37 p.m. ET

Carnival Corporation’s operating segments

Carnival Corporation (CCL) groups its ten brands into the following two operating segments: North America cruise brands and Europe, Australia, and Asia (or EAA) cruise brands. These two segments comprise almost 98% of the company’s revenue.

Another segment that Carnival reports is the Cruise Support segment. This segment represents ports, other facilities, and corporate services to support cruise operations. Another segment, the Tour segment, represents the hotels and transportation operations owned and operated under the Holland America Princess Alaska Tours.

In this article, we’ll look at the contribution of each of these segments to Carnival Corporation’s total revenue and profitability.

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Carnival’s operating segments

Here’s a useful summary of Carnival Corporation’s (CCL) operating segments.

  • The North America cruise brand segment includes the following four brands: Carnival Cruise Lines, Holland America Line, Princess, and Seabourn. In 2013, the segment represented ~60% of the company’s operating revenue. This segment operated 62 of Carnival’s 101 cruise ships. The North America cruise brand also has a higher operating margin of 10.2%. Brands in this segment compete with contemporary brands Royal Caribbean (RCL) and Royal Caribbean International and Norwegian Cruise Lines (NCLH). ETFs that hold shares in cruise liners include the PowerShares Dynamic Leisure and Entertainment Portfolio (PEJ), the PowerShares Dynamic Large Cap Growth Portfolio (PWB), and the Consumer Discretionary Select Sector SPDR Fund (XLY).
  • The EAA segment includes the following remaining six brands: Costa Cruises, AIDA Cruises, Cunard Line, Ibero Cruises, P&O Cruises (Australia), and P&O Cruises (United Kingdom). The EAA cruise brands segment operated Carnival Corporation’s remaining 39 cruise ships in 2013 and represented ~38% of the total revenues. The segment’s operating margin was 8% lower than the North America cruise segment.
  • The Cruise Support segment and Tour segment are smaller segments representing only ~2% of Carnival Corporation’s total revenue. In the Cruise Support segment, operating expenses are higher than revenue. The Tours segment generates an operating margin of 10.5%, the highest among all other segments.
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