Carnival on the rise with record bookings and strong demand

Carnival Corporation, the world’s largest cruise line, released its business update for the first quarter of 2023, reporting a record quarter of exceptional booking volume and strong financial performance.

The company’s first-quarter revenue nearly matched 2019 levels, beating its guidance for the quarter and beating expectations. Carnival’s first-quarter earnings before interest, taxes, depreciation and amortization also exceeded its forecast by more than $30 million. However, the outlook for 2023 could be something investors aren’t very happy with.

Strong Q1 2023 for Carnival Corporation

Carnival Corporation has started 2023 on a high note, beating the guidance it provided in the fourth quarter of 2022 by a multiple. The world’s largest cruise line also set a record for the highest number of bookings in a single quarter in history. At the same time, earnings before interest, taxes, depreciation and amortization exceeded expectations by more than $30 million.

Carnival Corporation reported a U.S. GAAP net loss of $693 million and an adjusted net loss of $690 million, significantly better than December’s guidance of $750 million to $850 million in net loss for the first quarter of 2023.

Adjusted EBITDA for the first quarter was $382 million, beating the guidance range of $250 million to $350 million. Revenue in the first quarter reached $4.4 billion, 95% of the company’s revenue in 2019.

Commenting on the company’s performance, CEO Josh Weinstein said: “In the first quarter, we exceeded our forecast for all measures. We delivered record net daily cash in the first quarter, beating the high end of our guidance, driven by improving ticket pricing and continued growth in inflight revenue, while delivering an additional 7 point occupancy at higher capacity compared to the previous quarter .”

The significantly better figures of the first quarter have ensured that Carnival can also pay off the enormous mountain of debt of the last three years with cash. Much of this money comes from a record-breaking wave season.

Chief Financial Officer David Bernstein noted: “We believe our debt levels peaked this quarter and will decrease over time based on our ample cash position of $8.1 billion and the expected cash flow strength of our business.”

record booking volume

Carnival Corporation reported the highest quarterly booking volume in its history, breaking records for cruises in North America, Australia and Europe.

Weinstein continued: “We’re enjoying a phenomenal wave season, achieving our highest quarterly booking volume to date and breaking records in North America and Europe. Our strong performance has continued into March and we expect this positive trend to continue based on the success of our efforts to stimulate demand.”

Total customer deposits hit a record $5.7 billion in the first quarter on February 28, 2023, exceeding the previous first quarter record of $4.9 billion on February 28, 2019 by 16%.

Is Carnival Corporation on its way back?

Carnival expects to return to 100% occupancy by the summer, where it already hit 98% last quarter. It is even slimmed down further removed Seabourn Odyssey from the fleeta move Carnival expects to turn a profit.

The move of three Costa Cruises cruise lines from Costa to the hugely successful Carnival Cruise Line appears to be a hugely successful strategic decision given the interest in onboard cruising Bright carnival, Carnival VeniceAnd Carnival Florence Climax.

The financial results announced today could signal the turning point that investors have been waiting for. For the past two years, there had been hopes that Carnival Corporation could match the performance of its competitors, particularly the Royal Caribbean Group. However, while Royal has gained almost $40 in share price since March 2020, Carnival Corporation is lagging behind.

With occupancy rates returning to and potentially exceeding 100 percent and bookings beating all expectations for 2023, Carnival Corporation could be back to being the golden goose it once was. But investors don’t seem to agree.

Carnival Corporation’s outlook for the second quarter and the rest of 2023 seems overly negative, despite the company reporting better-than-expected first-quarter financial results and record bookings.

Also Read: All Carnival Cruise Ships by Age – From Newest to Oldest

The company’s dismal second-quarter outlook and full-year losses caused the stock to fall 6% after a strong open, overshadowing phenomenal sales growth. The company expects a loss per share of 42 to 34 cents for the second quarter and an adjusted loss per share of 44 to 28 cents for the fiscal year 2023.