Carnival narrows losses, ups revenues and disappoints analysts

Written by Nick Blenkey
Carnival corporation CEO

Carnival Corporation CEO Josh Weinstein: “We are focused on delivering significant revenue growth over the long-term, while taking advantage of near-term tactics to quickly capture price and bookings in the interim.”

The world’s largest cruise company — Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) — had some positive trends to report when it released its third quarter 2022 business update this morning. Still, those trends weren’t positive enough to please investors and the company’s shares were down by more than 23% when markets closed today, with the shares of other cruise majors also taking a hit. What the market didn’t like was that Carnival didn’t meet analysts’ expectations on earnings per share or revenues.

While analysts may not be happy, Carnival’s customers look to be more so. The company reports that booking volumes for all future sailings during the third quarter of 2022 saw a continuation of the accelerated booking volumes during the second quarter of 2022, closing the gap with the strong levels of 2019 (the most recent full year of guest cruise operation). Since the company announced relaxed COVID protocols in mid-August, aligning it more closely with land-based vacation alternatives, booking volumes for all future sailings, it says,”have been considerably higher than strong 2019 levels.”

HIGHLIGHTS
  • U.S. GAAP net loss of $770 million and adjusted net loss of $688 million for the third quarter of 2022.
  • Adjusted EBITDA for the third quarter of 2022 was over $300 million, turning positive for the first time since the resumption of guest cruise operations and marking a significant milestone.
  • Revenue increased by nearly 80% in the third quarter of 2022 compared to second quarter 2022, reflecting continued sequential improvement.
  • Occupancy in the third quarter of 2022 increased 15 percentage points from the prior quarter.
  • Third quarter 2022 ended with $7.4 billion of liquidity, including cash and borrowings available under the company’s revolving credit facility.
POSITIVE TRAJECTORY

“During our third quarter our business continued its positive trajectory, achieving over $300 million of adjusted EBITDA and reaching nearly 90% occupancy on our August sailings. We are continuing to close the gap to 2019 as we progress through the year, building occupancy on higher capacity and lower unit costs,” said Carnival Corporation & plc’s Chief Executive Officer Josh Weinstein. “Since announcing the relaxation of our protocols last month, we have seen a meaningful improvement in booking volumes and are now running considerably ahead of strong 2019 levels. We expect to further capitalize on this momentum with renewed efforts to generate demand. We are focused on delivering significant revenue growth over the long-term, while taking advantage of near-term tactics to quickly capture price and bookings in the interim.”

Weinstein added, “With a transformed fleet, an unmatched portfolio of well recognized brands, unparalleled scale in an under-penetrated industry and an incredibly talented global team, we have the ability to drive durable revenue growth through pricing improvements over time. We believe this will provide significant free cash flow and accelerate our return to strong profitability and investment grade credit ratings.”

  • Read Carnival Corporation’s full third quarter business update HERE
Categories: Cruise Ships, News Tags: , ,