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HomeFinanceCarnival’s stock falls further, even as results beat expectations

Carnival’s stock falls further, even as results beat expectations


Shares of Carnival Corp. continued their pullback Monday, even after the cruise operator reported fiscal second-quarter results that beat expectations and provided an upbeat outlook.

Net losses for the quarter to May 31 narrowed by 78%, to $407 million, or 32 cents a share, from $1.83 billion, or $1.61 a share, in the same period a year ago.

Excluding nonrecurring items, adjusted per-share losses narrowed 81%, to 31 cents from $1.64, to beat the FactSet loss consensus of 34 cents.

Revenue rocketed 104.5% to a second-quarter record of $4.91 billion, above the FactSet consensus of $4.79 billion. Passenger-ticket revenue soared 144.4% to $3.14 billion amid higher pricing, and onboard and other revenue increased 58.6% to $1.77 billion.

The stock
CCL,
-11.61%

slumped 8.1% in morning trading, enough to pace all of the S&P 500’s
SPX,
-0.13%

decliners. It has lost 9.9% since closing at a 13-month high of $16.12 on June 15.

Prior to Monday’s sell-off, the stock had been up 40.7% month to date, which had put it on track for the best monthly performance since it soared 43.3% in February 2021. Currently, the stock is up just 29.3% in June, which would be the biggest one-month gain since it rallied 34.2% in January 2023.

Carnival’s stock weakness was weighing on its rivals as well, as shares of Norwegian Cruise Line Holdings Ltd.
NCLH,
-5.90%

shed 3.7% and Royal Caribbean Group’s
RCL,
-2.90%

stock fell 0.8%.

At Carnival, occupancy improved to 98% from 69%, passengers carried rose 76% to 3 million and passenger cruise days increased 91% to 21.8 million.

“Our momentous wave period, typically a first-quarter event, started in record-breaking fashion at the end of the fourth quarter, set a record in the first quarter, actually accelerated in the second quarter and has continued into the third quarter,” said Chief Executive Officer Josh Weinstein. “Booking volumes have been tremendous, and we are gaining momentum with favorable pricing trends, which reflects improved commercial execution and returns on our advertising investments.”

For fiscal 2023, the company raised its outlook for adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) to $4.1 billion to $4.25 billion, up from $3.9 billion to $4.1 billion.

The company now expects 2023 net per diems in constant currency, or the cruise rate divided by days on board excluding changes in foreign-currency rates, of 5.5% to 6.5% above 2019 levels, compared with previous guidance of up 2.5% to 3.5%.

Carnival’s stock has still run up 80.2% year to date, while the S&P 500 has gained 13.5%.



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