Why Is Cruise Operator Carnival Cruise Stock Creating Waves Today?

Carnival Corp CCL CUK shares are trading higher by around 7% after it reported Q4 FY23 results.

Sales of $5.397 billion beat the analyst consensus of $5.306 billion.

Passenger Cruise Days (PCD) rose to 23.6 million from 18.3 million a year ago. Occupancy for Q4 was 101%. 

Total customer deposits reached a fourth-quarter record of $6.4 billion, surpassing the previous fourth-quarter record of $5.1 billion (as of November 30, 2022) by 25%.

Selling and administrative expenses rose to $788 million from $741 million a year ago.

The operating income for the quarter was $384 million compared to a loss of $(1.14) billion last year. 

Adjusted EBITDA of $946 million exceeded the September guidance range, driven by continued strength in demand, driving ticket prices higher.

Adjusted EPS loss of $(0.07) beat the consensus loss of $(0.13). 

Operating cash flow for the year was $4.3 billion, with an adjusted free cash flow of $2.1 billion.

The company held $2.42 billion in cash and equivalents as of November 30, 2023. 

"We entered the year with the best booked position we have ever seen, and now have nearly two-thirds of our occupancy already on the books for 2024, at considerably higher prices (in constant currency). We continue to experience strong bookings momentum across the board, with our European brands showing remarkable strength during the quarter with booking volumes running up well into the double digits at considerably higher prices (in constant currency)," said Josh Weinstein, CEO.

Outlook: The company expects Q1 adjusted EBITDA of $0.8 billion, more than double Y/Y, and adjusted EPS loss of about $(0.22) vs. $(0.12) estimate.

Net yields (in constant currency) is projected to rise around 16.5% Y/Y in Q1, with occupancy returning to historical levels as the company closes the remaining occupancy gap in H1. 

For FY24, CCL sees adjusted EBITDA of about $5.6 billion and adj. EPS of $0.93 (same as in consensus).

Net yields (in constant currency) are projected to rise around 8.5% Y/Y in FY24, reflecting continued pricing and onboard spending strength. 

Also Read: The Carnival Is Not Over: A Remarkable Bounceback For Cruise Industry After Punishing 2 Years

Price Action: CCL shares are up 7.61% at $19.44 on the last check Thursday. 

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