Baltimore bridge disaster could have a $10 million impact on Carnival Corporation earnings

Image: Carnival Corporation

Cruise giant Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) followed yesterday’s announcement of its second newbuild order this year by reporting record first quarter earnings and all time high bookings. Still, the Baltimore bridge disaster cast a shadow on the company’s guidance for full year 2024. As the response to the Francis Scott Key Bridge collapse transitions to a recovery effort, we can expect many other companies to report similar impacts.

“Given the timing of yesterday’s event in Baltimore and the temporary change in homeport, our guidance does not include the current estimated impact of up to $10 million on both adjusted EBITDA and adjusted net income for the full year 2024,” Carnival Corporation cautioned. To put that in perspective, the company’s full year adjusted EBITDA guidance is approximately $5.63 billion.

LEGEND SWITCHED TO NORFOLK

The company’s Carnival Cruise Line brand announced separately today, that it will temporarily move Carnival Legend’s Baltimore operations to Norfolk, Virginia.

Carnival Legend is scheduled to return from its current voyage on Sunday, March 31. It will now return to Norfolk on Sunday, and guests will be provided complimentary bus service back to Baltimore. Carnival Legend’s next seven-day itinerary on March 31 will then operate from and return to Norfolk. Guests on the current and upcoming cruises are being informed of this change.

“Our thoughts remain with the impacted families and first responders in Baltimore,” said Christine Duffy, president of Carnival Cruise Line. “We appreciate the pledge made by President Biden today to dedicate all available resources to reopen Baltimore Harbor to marine traffic as soon as possible. As those plans are finalized, we will update our future cruise guests on when we will return home to Baltimore, but in the meantime, we appreciate the quick response and support from officials in Norfolk.”

STRONG QUARTER

“This has been a fantastic start to the year. We delivered another strong quarter that outperformed guidance on every measure, while concluding a monumental wave season that achieved all-time high booking volumes at considerably higher prices,” said Carnival Corporation & plc’s CEO Josh Weinstein in his comments on the first quarter.

“These results are a continuation of the strong demand we have been generating across our brands and all core deployments, leading to an upward revision of full year expectations by more than a point of incremental yield improvement and setting us up nicely to deliver a nearly double-digit improvement in net yields,” Weinstein added. “With much of this year on the books, we have even greater conviction in delivering record revenues and EBITDA, along with a step change improvement in operating performance, and have begun turning more of our attention to delivering an even stronger 2025.”

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FIRST QUARTER HIGHLIGHTS

• Record first quarter revenues of $5.4 billion with record net yields (in constant currency) and record net per diems (in constant currency) both significantly exceeding 2023 levels
• The company improved its first quarter bottom line by nearly $500 million compared to 2023 and adjusted net loss was better than December guidance, with continued strength in demand driving ticket prices higher (see “Non-GAAP Financial Measures” below).
• During the first quarter, booking volumes hit an all-time high with prices considerably higher year over year.
• Following a successful wave season (peak booking period), the company raised its full year 2024 net yield guidance (in constant currency) by over a point to approximately 9.5 percent compared to 2023 based on continued strength in demand and also improved its adjusted cruise costs excluding fuel guidance (in constant currency) by $35 million as compared to its December guidance.
• Total customer deposits reached a first quarter record of $7.0 billion, surpassing the previous first quarter record by $1.3 billion.
• The company redeemed its remaining second lien debt (9.875% second-priority secured notes), upsized its forward starting revolving facility by $400 million and extended its availability by two years.
• The company ordered its first newbuilds in five years, the tenth and eleventh in its highly successful Excel-class, scheduled to be delivered to Carnival Cruise Line in 2027 and 2028.

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