Carnival Q2: Revenue Doubles, SEA Change Program & More

Carnival Corp CCL reported second-quarter FY23 sales growth of 104.5% year-on-year to $4.91 billion, beating the analyst consensus of $4.77 billion.

Passenger Cruise Day (PCD) increased 91.2% Y/Y to 21.8 million. Occupancy for Q2 was 98%. Available lower berth days (ALBD) for Q2 were 22.3 million.

Total customer deposits as of May 31, 2023, totaled $7.2 billion. Selling and administrative expenses rose 18.9% to $736 million.

The operating income for the quarter was $120 million from a loss of $(1.4) billion last year. The operating margin was 2.4%.

The company held $4.5 billion in cash and equivalents as of May 31, 2023. Operating cash flow for the quarter was $1.1 billion, with an adjusted free cash flow of $625 million.

Adjusted EBITDA for the quarter was $681 million at the high end of the guidance of $600 million - $700 million.

Adjusted EPS loss for the quarter of $(0.31) beat the consensus of $(0.34). 

Carnival CEO Josh Weinstein commented, "We reached a meaningful inflection point for revenue this quarter, with net yields surpassing 2019's strong levels, and we achieved positive operating income, cash from operations and adjusted free cash flow."

"With bookings and customer deposits hitting all-time highs, we are clearly gaining momentum on an upward trajectory."

Outlook: Carnival raised FY23 adjusted EBITDA guidance to $4.10 billion - $4.25 billion (prior $3.9 billion - $4.1 billion); Occupancy of 100% or higher.

The company expects Q3 adjusted EBITDA of $2.05 billion - $2.15 billion and and adjusted net income of $0.95 billion-$1.05 billion; Occupancy rate of 107% or higher.

The company expects net yields compared to 2019 (in constant currency) to be positive for the second half of the year, despite the headwinds from the loss of St. Petersburg as a marquee destination due to the suspension of cruises to Russia.

Price Action: CCL shares are trading lower by 10% at $14.20 on the last check Monday.