Carnival Rides The Wave: Strong Bookings And Robust Q2 Earnings Boost Outlook

Carnival Corporation CCL shares are trading higher on Tuesday following better-than-expected second-quarter earnings.

The company reported second-quarter adjusted earnings per share of 11 cents, beating the analyst consensus for a loss of 2 cents.

Carnival reported quarterly sales of $5.781 billion, beating the street view of $5.675 billion.

The company registered a second-quarter operating income of $560 million, nearly five times 2023 levels.

Adjusted EBITDA in the quarter under review pegs at $1.2 billion, up 75% year over year.

The company continues to experience strong bookings momentum driven by record booking volumes for 2025 sailings.

While still early, the cumulative advanced booked position for full year 2025 is even higher than 2024 in both price (in constant currency) and occupancy, the company said.

Carnival confirmed that it will sunset the P&O Cruises (Australia) brand and fold the Australia operations into Carnival Cruise Line in March 2025.

This realignment will further optimize the composition of the company’s global brand portfolio and will strengthen its performance in the South Pacific through numerous operational efficiencies.

The company ended the quarter with $4.6 billion of liquidity. As of May-end, the company’s outstanding debt maturities for the remainder of the year, 2025, and 2026 were $1.2 billion, $1.7 billion, and $2.8 billion.

Outlook: Carnival sees third-quarter adjusted earnings per share of $1.15 versus an estimate of $1.10. Carnival projects adjusted EBITDA of approximately $2.66 billion, up 20% year over year.

“Based on continued strong demand trends, we are taking up our expectations for the year with net yields now forecasted to top ten percent and propelling us towards double-digit returns on invested capital,” commented Chief Executive Officer Josh Weinstein.

For 2024, the company sees net yields up approximately 10.25% year over year (prior view: 9.5%). Carnival sees adjusted net income of approximately $1.55 billion, better than March guidance by approximately $275 million.

“Looking forward, we expect substantial free cash flow driven by our ongoing operational execution and the lowest newbuild order book in decades to deliver continued improvements in our leverage metrics and balance sheet,” said Chief Financial Officer David Bernstein.

Price Action: CCL shares are trading higher by 5% to $17.21 at last check Tuesday.

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Image: Ed Junkins from Pixabay