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Carnival (CCL) Announces Q3 Business Update, Shares Up
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Carnival Corporation & plc (CCL - Free Report) recently provided its third-quarter fiscal 2021 business update. The company announced that its “voyages are already cash flow positive” and it anticipates the trend to continue. Following the news, the company’s shares increased 3% during the trading hour on Sep 24.
A look at the company’s price trend reveals that Carnival has underperformed the industry in the past six months. The stock has declined 0.8% against the industry’s growth of 4.6%.
Q3 Financials
During the fiscal third quarter, the company reported adjusted net loss of $2 billion at par with the previous quarter’s levels. GAAP net loss for the quarter amounted to $2.8 billion.
Carnival ended the quarter with liquidity of $7.8 billion. The company announced that it has enough liquidity to return to full operation. It further added that it will continue to pursue refinancing opportunities to lower interest expenses and extend maturities.
Average monthly cash burn in the third quarter totaled $510 million, in line with the $500 million monthly average cash burn rate for the first half of 2021. However, cash burn for the third quarter was better than the prior guidance.
The company informed that gradual resumption of business will continue to have a material impact on its liquidity, financial position and results of operations.
In third-quarter 2021, occupancy was 54%. In June and August, occupancy was 39% and 59%, respectively.
Image Source: Zacks Investment Research
Bookings Update
During the third quarter, booking volumes for all future cruises were higher than booking volumes during the first quarter of 2021. However, booking volumes in August were not as robust as it were in second-quarter 2021 on concerns regarding the Delta variant. The company stated that cumulative advanced bookings for the second half of 2022 are ahead of a very robust 2019 as of Aug 31, 2021.
In this regard, Carnival’s president and CEO Arnold Donald stated, “The broader environment for travel, while choppy, has improved dramatically since last summer and we believe it should improve even further by next summer, if the current trend of vaccine rollouts and advancements in therapies continues. We have also opened bookings for further out cruises in 2023, with unprecedented early demand.”
Meanwhile, total customer deposits as of Aug 31, 2021 were $3.1 billion compared with $2.5 billion as of May 31, 2021.
Resumption Plan
The company has resumed operations with 35% of its capacity, which includes nine brands, as of Aug 31, 2021. It plans to resume cruise operations with 50 ships, or 61% of its capacity, by Nov 30, 2021 and with 71 ships, or 75% of its capacity, by June 2022. The company intends to have its full fleet back in operation in the spring of 2022.
Image: Bigstock
Carnival (CCL) Announces Q3 Business Update, Shares Up
Carnival Corporation & plc (CCL - Free Report) recently provided its third-quarter fiscal 2021 business update. The company announced that its “voyages are already cash flow positive” and it anticipates the trend to continue. Following the news, the company’s shares increased 3% during the trading hour on Sep 24.
A look at the company’s price trend reveals that Carnival has underperformed the industry in the past six months. The stock has declined 0.8% against the industry’s growth of 4.6%.
Q3 Financials
During the fiscal third quarter, the company reported adjusted net loss of $2 billion at par with the previous quarter’s levels. GAAP net loss for the quarter amounted to $2.8 billion.
Carnival ended the quarter with liquidity of $7.8 billion. The company announced that it has enough liquidity to return to full operation. It further added that it will continue to pursue refinancing opportunities to lower interest expenses and extend maturities.
Average monthly cash burn in the third quarter totaled $510 million, in line with the $500 million monthly average cash burn rate for the first half of 2021. However, cash burn for the third quarter was better than the prior guidance.
The company informed that gradual resumption of business will continue to have a material impact on its liquidity, financial position and results of operations.
In third-quarter 2021, occupancy was 54%. In June and August, occupancy was 39% and 59%, respectively.
Image Source: Zacks Investment Research
Bookings Update
During the third quarter, booking volumes for all future cruises were higher than booking volumes during the first quarter of 2021. However, booking volumes in August were not as robust as it were in second-quarter 2021 on concerns regarding the Delta variant. The company stated that cumulative advanced bookings for the second half of 2022 are ahead of a very robust 2019 as of Aug 31, 2021.
In this regard, Carnival’s president and CEO Arnold Donald stated, “The broader environment for travel, while choppy, has improved dramatically since last summer and we believe it should improve even further by next summer, if the current trend of vaccine rollouts and advancements in therapies continues. We have also opened bookings for further out cruises in 2023, with unprecedented early demand.”
Meanwhile, total customer deposits as of Aug 31, 2021 were $3.1 billion compared with $2.5 billion as of May 31, 2021.
Resumption Plan
The company has resumed operations with 35% of its capacity, which includes nine brands, as of Aug 31, 2021. It plans to resume cruise operations with 50 ships, or 61% of its capacity, by Nov 30, 2021 and with 71 ships, or 75% of its capacity, by June 2022. The company intends to have its full fleet back in operation in the spring of 2022.
Carnival has a Zacks Rank #4 (Sell).
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