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Carnival (CCL) Delays Princess Cruises Return to Sailing

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Carnival Corporation & plc (CCL - Free Report) has delayed the return to sailing for its cruise ships — Island Princess and Diamond Princess amid the ongoing pandemic. While Island Princess will resume sailing in spring 2022 with a series of cruises to the Caribbean, Diamond Princess will resume sailing in spring 2022.

Due to the aforementioned changes, Princess Cruises has cancelled its 2021-2022 South America and Antarctica Program on Diamond Princess. It has also abandoned its 2022 World Cruise and two December 2021 Island Princess cruises.

Jan Swartz, Princess Cruises’ president said “Following our successful restart in Alaska and the UK, we look forward to welcoming our guests back on board as we continue our return to cruise operations, keeping the health and safety of our guests and teammates our top priority.”

Cancellations have been impacting the booking trends, which in turn will hurt 2021 financial results. The company is providing guests with opportunity to transfer 100% of the money paid for their cancelled cruise to a future cruise of their choice. The company is providing full refund.

Previously, the company announced plans to resume operations for three ships in September and four ships in October 2021. It plans to restart three vessels — Carnival Glory (from New Orleans), Carnival Pride (Baltimore) and Carnival Dream (Galveston) — starting Sep 5, Sep 12 and Sep 19, respectively. It plans to restart four additional ships — Carnival Conquest (from Miami), Carnival Freedom (Miami), Carnival Elation (Port Canaveral) and Carnival Sensation (Mobile) — effective from Oct 8, Oct 9, Oct 11 and Oct 21, respectively.

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Price Performance

Shares of the company have gained 49.6% in the past year, compared with the industry’s rally of 36.1%. The company is benefiting from cruise resumption, impressive booking volumes for all future cruises and brand recognition. During the second quarter, booking volumes for all future cruises increased 45% compared with the prior quarter. In third-quarter 2021, it anticipates positive cash flow from the 27 ships, which will have guest cruise operations during the quarter.

Zacks Rank & a Key Pick

Carnival — which shares space with Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Royal Caribbean Group (RCL - Free Report) in the Zacks Leisure and Recreation Services industry — carries a Zacks Rank #4 (Sell) at present.

A better-ranked stock in the same space is SeaWorld Entertainment, Inc. , which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SeaWorld Entertainment 2021 earnings are expected to soar 176.4%.


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