Carnival Corp. Q2 Adj. Loss Narrows; Introduces SEA Change Program

Carnival Corporation & plc (CCL, CCL.L, CUK) said the company reached a meaningful inflection point for revenue during its second quarter, with net yields surpassing 2019’s strong levels. The company recorded positive operating income, cash from operations and adjusted free cash flow during the quarter. Carnival noted that it saw continued acceleration of demand, with total bookings made during the quarter reaching a new all-time high for all future sailings.

Second quarter net loss was $407 million or $0.32 per share compared to a loss of $1.83 billion or $1.61 per share, prior year. Operating income for the second quarter was $120 million, turning positive for the first time since the resumption of guest cruise operations. The company noted that adjusted EBITDA was $681 million, at the high end of the March guidance range of $600 million to $700 million. Adjusted loss per share was $0.31 compared to a loss of $1.64. On average, 15 analysts polled by Thomson Reuters expected the company to report a loss per share of $0.34, for the quarter. Analysts’ estimates typically exclude special items.

Second quarter revenue increased to $4.91 billion from $2.40 billion, last year. Analysts on average had estimated $4.77 billion in revenue.

“Based on continued strength in pricing, we delivered outperformance in the second quarter and raised our expectation for revenue in the second half, which coupled with the interest expense benefit we are capturing from deleveraging will bring another $275 million dollars to the bottom line for the year,” Carnival CEO Josh Weinstein said.

For the third quarter, the company expects: adjusted EBITDA of $2.05 billion to $2.15 billion, and adjusted net income of $0.95 billion to $1.05 billion. Adjusted earnings per share is estimated in a range of $0.70 to $0.77.

For the full year 2023, the company expects: adjusted EBITDA of $4.10 billion to $4.25 billion, above March guidance’s range and with a midpoint increase of $175 million. Adjusted loss per share is expected in a range of $0.20 to $0.08.

Carnival introduced its SEA Change Program, a set of key performance targets over a three-year period ending in 2026. The program targets 50% increase in adjusted EBITDA per available lower berth day compared to 2023 June guidance. It also projects 12% adjusted Return on Invested Capital, more than doubling adjusted ROIC from 2023 to 2026.

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