Cruiseline Operator Carnival Stock Slides - Here's Why

Carnival Corp CCL CUK reported first-quarter FY24 sales growth of 22% year-on-year to $5.406 billion, slightly missing the analyst consensus estimate of $5.427 billion.

Passenger Cruise Day (PCD) increased 16.3% Y/Y to 23.5 million. Occupancy for the quarter was 102%. Available lower berth days (ALBD) were 23 million.

Total customer deposits reached a first-quarter record of $7.0 billion, surpassing the previous first-quarter record by $1.3 billion.

Gross margin expanded to 790 basis points to 20.1%. Selling and administrative expenses rose 14.2% to $813 million.

The operating income for the quarter was $276 million versus a loss of $(172) million last year. The operating margin was 5.1%.

The company held $2.2 billion in cash and equivalents as of Feb. 29, 2024.

Adjusted EBITDA for the quarter jumped to $871 million. Net yield per ALBD increased 18%.

Adjusted EPS loss for the quarter of $(0.14) beat the consensus of $(0.18).

Carnival CEO Josh Weinstein commented, “This has been a fantastic start to the year. We delivered another strong quarter that outperformed guidance on every measure, while concluding a monumental wave season that achieved all-time high booking volumes at considerably higher prices.”

Outlook: Carnival sees FY24 adjusted EBITDA of $5.63 billion (prior outlook $5.6 billion); Net yields in constant currency to grow about 9.5% (prior view up 8.5%).

Adjusted EPS of ~$0.98 (prior view ~$0.93) versus an estimate of $1.00.

For the second quarter, Carnival sees an adjusted EBITDA of about $1.05 billion; Net yields in constant currency to grow 10.5%.

The Company sees second-quarter Adjusted EPS of $(0.03), matching the analyst estimate.

Carnival sees $2.3 billion in capital expenditure for the remainder of 2024.

Given the timing of yesterday’s event in Baltimore and the temporary change in homeport, the company’s guidance does not include the current estimated impact of up to $10 million on both adjusted EBITDA and adjusted net income for the full year 2024.

Price Action: CCL shares are trading lower by 1.97% at $16.69 on the last check Wednesday.

Image: Ed Junkins from Pixabay