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A large Carnival cruise docks the harbor in turquoise waters.
Dreamstine
Carnival shares rose on Friday after the cruise line posted second-quarter revenue that rose sharply from the first quarter of 2022.
Carnival (ticket: CCL) reported a GAAP loss of $ 1.61 per share, broader than analysts ’estimates for a loss of $ 1.08 per share. Revenue was $ 2.4 billion, up nearly 50% from the first quarter, but below projections of $ 2.76 billion, according to FactSet.
Occupancy in the second quarter was 69%, up from 54% in the previous quarter. Customer deposits, in turn, rose from $ 1.4 billion to $ 5.1 billion on May 31, compared to $ 3.7 billion at the end of February.
As of Friday, 91% of the company’s capacity was in guest cruise operations, while booking volumes for future cruises in the second quarter were nearly double the booking volumes during the first quarter. Five of Carnival’s nine brands are now returning to their entire fleet in guest cruise operations.
“It’s reinforcing to see the continued strength of demand with our guests overcoming much more restrictive protocols than society in general and travel in general, leading to almost double booking volumes since last quarter, with bookings in the short term even surpassing 2019, ”Arnold Donald said. , current CEO. “We were encouraged by near demand and continue to focus on optimizing employment while maintaining long-term prices.”
Carnival anticipates an improvement in adjusted cruise costs without including fuel from the first half of 2022 to the second half of 2022.
The company added that the Covid-19 pandemic, inflation and rising fuel prices were having a “material impact” on the company’s business and that it expected to report a net loss by the third quarter of 2022 and the fiscal year. Carnival believes the adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, will improve with ongoing cruise operations until it returns to historic levels in 2023. The company expects a positive adjusted EBITDA for the third quarter of 2022.
Carnival has also reaffirmed its commitment to its previously announced succession plan. As of Aug. 1, Donald will be named vice chairman of the board, while Josh Weinstein, current chief operating officer, will assume the role of chief executive officer.
Carnival shares rose 10% to $ 10.62 on Friday. But stocks have lost 47% over the past year, battered by concerns that a possible recession could slow consumer cruise demand.
Although the travel industry as a whole was successful during the pandemic, cruise lines absorbed a significant portion of the pain. Although travel has recovered, cruises have been slower to follow, due to rising fuel and cost inflation, as well as Covid-19 restrictions that have prevented unvaccinated travelers from making it. cruises.
Carnival’s second-quarter results may encourage investors to think the fall could end soon. In fact, some analysts have been optimistic that a strong summer session could be a benefit for cruise companies.
Write to Sabrina Escobar at sabrina.escobar@barrons.com