Carnival shares fall to a 30-year low as losses and slumped sales pile up

Carnival Corp.’s stock Slumped to a fresh post-pandemic low on Friday, after the cruise operator reported another better-than-expected loss and slumped revenue, even as capacity utilization improved to 92%.

The share CCL,
that was the biggest loser in the S&P 500 Index SPX,
fell 23.3% to $7.03 to break the previous post-pandemic closing low of $7.97 on April 2, 2020 and close at the lowest price since October 15, 1992.

Carnival reported a net loss for the third fiscal quarter ended August 31, which narrowed to $770 million, or 65 cents a share, from a loss of $2.84 billion, or $2.50 a share share in the same period a year ago.

The FactSet consensus for losses per share was 11 cents.

Total revenue increased almost eight-fold from $546 million to $4.31 billion as lower berth days available (ALBD) improved from 17% to 92% of total fleet capacity, but well below FactSet consensus for revenue of $4.90 billion.

Passenger ticketing revenue grew nearly 9-fold to $2.60 billion, but missed the FactSet consensus of $3.10 billion, while inflight and other revenue grew seven-fold to $1.71 billion -$ increased but fell short of expectations of $1.81 billion.

The company has now reported a loss for every quarter since the second quarter of fiscal 2020, which ended in May, with losses in all but one of those quarters being larger than expected. Sales have now missed expectations for ten straight quarters.

“We will continue to close the gap into 2019 throughout the year by building utilization toward higher capacity and lower unit costs,” said Chief Executive Josh Weinstein.

The company said that fourth-quarter cumulative advance bookings are below the historical range at lower prices, primarily due to future cruise credits (FCCs), while 2023 cumulative advance bookings at “significantly higher” prices are slightly above the historical range .

ALBDs for the third quarter were 21 million and are expected to be 22 million for the fourth quarter. In the third quarter of last year, ALBDs were 3.8 million.

Cash used from operations was $344 million compared to $879 million a year ago, while cash and cash equivalents on the books decreased to $7.07 billion from $8.94 billion .

Shares of other cruise lines suffered collateral damage from Carnival, but have fared much better in recent months.

Shares of Norwegian Cruise Line Holdings Ltd. NCLH,
down 18.0% on Friday, but still up 9.4% from its June 2022 closing low of $10.38 and 46.2% from its March 18, 2020 close of $7.77; and Royal Caribbean Group shares RCL,
was down 13.2% on Friday, but was 21.2% above its July 2022 low of $31.28 and 69.7% above its post-pandemic low of $22.33 on March 18, 2020.

Meanwhile, the S&P 500 index fell 1.5% on Friday to close at its lowest level since November 2020. Carnival shares fall to a 30-year low as losses and slumped sales pile up

Brian Lowry

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