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This puts Arnold W. Donald in the top 30% of approval ratings compared to other CEOs of publicly-traded companies. Carnival Co. &'s stock was trading at $18.54 at the beginning of the year. Since then, CCL stock has decreased by 19.6% and is now trading at $14.90. In April 2022, Carnival said the week ending April 3 was the busiest for bookings in company history, up more than 10% from the prior record. The last of Carnival Cruise Line's 23 ships returned to service on May 2.
Is Carnival Cruise Lines profitable?
This doesn't mean that it's not a good time to walk the gangway and board Carnival before the ship starts sailing again. Let's go over some of the reasons why right now could be a good time to warm up to the top player in watery adventures. One of last year's biggest winners has been taking in water this year.
Carnival plc
Tour and Other segment represent the hotel and transportation operations of Holland America Princess Alaska Tours and other operations. Holland America Princess Alaska Tours is a tour company in Alaska and the Canadian Yukon, which complements its Alaska cruise operations. The Company’s cruise line brands offer a range of vacation options for guests with a variety of leisure-time activities. The company's world-class and steadily improving fleet puts it in a strong position to capitalize on robust and growing demand for cruising.
Why Carnival Corp. Stock Sank by Almost 11% in January - The Motley Fool
Why Carnival Corp. Stock Sank by Almost 11% in January.
Posted: Mon, 05 Feb 2024 08:00:00 GMT [source]
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It also faces competition from the broader travel and tourism industry, including resorts, casinos, and theme parks. For FY 2021, ended Nov. 30, 2021, Carnival reported a net loss of $9.5 billion on revenue of $1.9 billion. The Company’s segments include North America and Australia (NAA) cruise operations, Europe and Asia (EA) cruise operations, Cruise Support, and Tour and Other. NAA cruise operations include Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), and Seabourn. The EA segment includes Costa Cruises (Costa), AIDA Cruises (AIDA), P&O Cruises (UK) and Cunard. Cruise Support segment includes its portfolio of port destinations and other services, all of which are operated for the benefit of its cruise brands.
In fiscal 2023, which ended Nov. 30, the company reported revenue of $21.6 billion, a record figure that was up 77% year over year. This number exceeded the previous record, which came in fiscal 2019. Carnival may have been profitable in just one quarter over the last four years, but look where the ship is headed.
The stock closed at a new 52-week low of $7.03, below its pandemic plunge lows of April 2020, when shares traded around $7.80 intraday. It's easy to say this with the benefit of hindsight, but I don't necessarily think it's shocking to see Carnival putting up such strong numbers right now. Unless you were convinced that demand for cruise travel would permanently fall off a cliff, I bet you expected that this business would experience a reversion to the mean. During that 12-week stretch, the company hit a first-quarter record for sales. Key to this strong momentum is, without a surprise, robust demand from consumers.
Speaking of the economy, demand for cruise trips demonstrates cyclicality, as it's a discretionary purchase. I'm concerned about how Carnival will fare in a potential recessionary scenario, which could happen unpredictably. Does this setup on the dip make Carnival a once-in-a-generation investment opportunity? Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
Profitability
Before the pandemic, global ocean cruise passengers had grown at a 5.5% compound annual rate from 2003 through 2019. The industry had gotten back on a growth trajectory in 2023, with Carnival reporting all-time highs in bookings and customer deposits in the year's second quarter. Carnival Corporation & plc is a leisure travel company operating a fleet of cruise ships, hotels, and resorts with international destinations. Brands under the Carnival Corporation umbrella include Carnival Cruise Line, Princess Cruises, Holland America, P&O Cruises, Seaborn, Costa Cruises, AIDA Cruises, and Cunard. The company’s goal is to provide extraordinary vacations at an exceptional value. As of 2022, the company laid claim to nearly half of the global cruising market share with several new ships in the works.
NYSE: CCL
The company had to sell stock and issue debt to stay afloat. You can buy shares of Carnival directly through any brokerage account. The cruise ship operator trades under the stock ticker CCL. However, the company is also trying to repay the debt it took on during the pandemic. It will take the company several years to get debt back down to a more comfortable level. That's hindering its ability to grow shareholder value through dividends, share repurchases, and new investments.
Revenue rose 22% to $5.4 billion, narrowly missing Wall Street's top-line target. Carnival finally hurdled its previous pre-pandemic peak for the fiscal first quarter. Most of Carnival's slide this year happened after it posted mixed financial results late last month. The shares did inch higher the day after the company announced its fiscal first-quarter results four weeks ago, only to slide 17% after the initial move up. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services. However, the company suspended its dividend in March 2020 to conserve cash because of the pandemic's impact on its operations.
A lot of this capital was raised to buy the company time throughout the pandemic. But that's a huge burden that adds tremendous financial risk should there be economic weakness. It reduced its leverage by another $1.8 billion so far in fiscal 2024. Tackling debt that is about to come up or at the highest rate is going to make things a lot easier for the cruise line giant. Just imagine how easy things will get when rates start to move lower and its improving credit quality gets going.
The company operates 87 ships visiting more than 700 ports worldwide and catering to nearly 13 million passengers each year. The horizon gets even more snapshot friendly if you look out even longer. Analysts have been jacking up Carnival's fiscal 2025 prospects with every passing quarter. Wall Street pros are now modeling adjusted earnings of $1.42 a share for the next fiscal year that starts in December. Yes, the slide in Carnival's stock this year finds it now fetching just 10 times next fiscal year's profit target. An alternative to investing directly in Carnival by purchasing shares is to consider passively investing in the company through an exchange-traded fund (ETF) that holds shares.
When people have a little extra cash, they indulge in offerings from these companies. Carnival could complete a reverse stock split to help reduce its outstanding share count. © 2024 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see Barchart's disclaimer. Upgrade to MarketBeat All Access to add more stocks to your watchlist.
Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The leading cruise ship operator is benefiting from the growing demand for cruises. That should enable the company to increase profits and cash flow in the coming years. Before the pandemic, Carnival was a very profitable company. The company reported $3 billion of adjusted net income in 2019, which matched its previous record high in 2018.
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