What Is Happening With Carnival Cruise Line?

Carnival Cruise Line is expanding its fleet with three new mega-ships, each with more than 230,000 gross tons. The first of these vessels will be launched in the summer of 2029, featuring week-long sailings aboard Carnival Jubilee, which will visit the popular Western Caribbean of Mahogany Bay. Carnival is also absorbing five ships from its sister brands to join the fleet between 2023 and 2025, with the latest two coming from PO Cruises.

Carnival Corporation has announced plans for three new cruise ships, including Carnival Miracle, which will offer cruises in Europe in the summer of 2025, and The Pacific Encounter and Pacific Adventure ships to be rebranded and operated by the Carnival Cruise Line brand. The Pacific Explorer will exit the fleet.

Carnival Corporation has ordered three additional ships for Carnival Cruise Line, introducing a new class of ship that will deliver even more fun to the most adventurous passengers. The company has rules that passengers must follow or face consequences, and cruises with Carnival are now easier, with vaccines and testing no longer required for most cruises.

Carnival Corporation is also preparing to launch the first cruise ship completely powered by liquefied natural gas, known as the world’s cleanest burning fossil fuel. People who book their own excursions or visit the port on their own have no special protections, and the cruise lines can and will leave them.

Why is Carnival tanking?

But this is a business that is recovering nicely from the worst days of the pandemic. At one point, Carnival was forced to halt its operations temporarily to prevent the spread of COVID-19. Revenue took a huge hit, dropping 91% between fiscal 2019 and fiscal 2021.

Now that the company has bounced back and looks to be on solid footing, I’m sure it’s starting to catch the attention of investors. Shares still trade at a reasonable forward P/E of 14.

Rough waters. 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.

What is Carnival’s big announcement?

Carnival Cruise Line on Tuesday announced that it ordered three massive new cruise ships that will be among the biggest ever built.

Scheduled to debut between 2029 and 2033, the three vessels will be the biggest ever for Carnival at 230,000 tons. That’s about 25% bigger than the biggest Carnival vessels currently in operation.

For more cruise news, guides and tips, sign up for TPG’s cruise newsletter.

They’ll also be among the biggest at any cruise line. Only three cruise ships currently sailing are bigger than 230,000 gross tons: Royal Caribbean’s recently unveiled Icon of the Seas, Utopia of the Seas and Wonder of the Seas.

Why did Carnival go down?

Cruise line operator Carnival (NYSE:CCL, CUK) was capsized by the rogue pandemic wave. Because its industry was drydocked longer than virtually any other due to COVID-19, cruise ship stocks were brought to the brink.

Forced to take on massive amounts of debt to survive, cruise operators are still listing and Carnival stock is down 5% year-to-date. Shares remain 60% below their pre-pandemic high.

Yet Carnival also recently reported earnings that were stronger than expected. A surprise second-quarter profit caught Wall Street unaware as it was looking for another quarter of losses. With record bookings and a demographic primed for cruising, is Carnival stock about to ride a tsunami of growth higher? Let’s look at the evidence to see whether CCL will hang ten or sink to Davy Jones’ locker once again.

Carnival’s second quarter was a welcome reprieve. Revenue of $5.8 billion set a new record for the cruise ship operator as did customer deposits for future cruises of $8.3 billion. Even better, the company was also able to lock in higher prices. It all combined to provide ballast for the cruise line, letting it post a GAAP profit of 7 cents per share and adjusted earnings of 11 cents per share. Analysts had forecast a 2 cents per share loss.

Is a Carnival cruise in debt?

Total debt on the balance sheet as of May 2024 : $30.65 B. According to Carnival Corporation’s latest financial reports the company’s total debt is $30.65 B.A company’s total debt is the sum of all current and non-current debts.

Carnival Corporation – Total debt on balance sheet (from 2001 to 2024)

Is Carnival Cruise Line in debt?

Total debt on the balance sheet as of May 2024 : $30.65 B. According to Carnival Corporation’s latest financial reports the company’s total debt is $30.65 B.A company’s total debt is the sum of all current and non-current debts.

Carnival Corporation – Total debt on balance sheet (from 2001 to 2024)

Why are Carnival cruises so expensive right now?

Renewed importance of booking your cruise in advance. With the record demand Carnival is seeing, inventory is selling out further in advance, leaving guests with fewer cabin choices, higher prices, and fewer last-minute deals.

Not only does booking early help ensure you get the best rate, but you also have more time to save up for the cruise.

When you make your reservation, you only have to place a deposit, rather than pay the entire fare upfront. The final payment date varies based on the duration of your sailing. For cruises 5 nights or less, it’s 76 days before sailing. It increases to 91 days prior to sailing for cruises 6 nights or longer.

Read more: 15 things I wish I knew before setting foot on a Carnival ship.

Is Carnival Cruise Line still in business?

If you’re thinking of cruising, there’s a very good chance you’re considering a Carnival cruise. Growing since our founding in 1972, Carnival Cruise Line — “The World’s Most Popular Cruise Line®” — now carries millions of guests every year. Plus we’re so pumped about our latest ships, Carnival Jubilee®, which set sail last December… and Carnival Firenze™, now sailing from Long Beach!

Carnival Cruise Line is proud to be part of a family of companies owned by Carnival Corporation, which includes sister lines Princess Cruises, Holland America Line and Cunard Line, among others.

Carnival Corporation, parent company of Carnival Cruise Line and other great brands, is the global leader in the cruise industry, leading the way in innovative and sustainable cruising to deliver memorable vacations and build borderless connections. But we never forget to create unforgettable happiness for our guests during their extraordinary cruise vacations, all while honoring the integrity of every ocean we sail, place we visit and life we touch.

What is Carnival’s debt?

Carnival amassed a ton of debt in order to survive the pandemic and currently has a long-term debt obligation of $28.55 billion. This is far too much compared to its $2.39 billion in operating income. The company can barely pay the net interest on its debt, which stands at $1.79 billion.

Why is Carnival getting rid of ships?

During the first few months of the shutdown, Carnival Corporation announced that at least 13 older ships across several cruise brands would be sold or scrapped. This was part of slimming down and eliminating its least efficient ships.

But that number kept growing. The number of ships leaving Carnival Cruise Line, Princess Cruises, Holland America Line, AIDA, and P&O Cruises fleets eventually increased to 21.

While some ships found new homes in Europe and Asia, many met a sad fate in scrapyards on the shores of India and Turkey.

Is Carnival Cruise going to recover?

Demand for cruises is still hot. Carnival demonstrated an incredible recovery last year, as expected. Now it’s keeping up its solid performance as it fields high demand, with record revenue and improving profitability.

The 2024 fiscal first-quarter (ended Feb. 29) results surpassed expectations across several metrics. Revenue was a record $5.4 billion, 23% higher than last year. It had record first-quarter deposits of $7 billion, and generally accepted accounting principles (GAAP) net loss improved from $693 million last year to $214 million this year.

Management had previously said that it was coming into 2024 in its best booked position ever, and it’s already in a better position for 2025 than it was for 2024 at this time last year. It has limited inventory for the rest of the year, pushing out bookings from strong demand into a longer curve at higher ticket prices, setting itself up for a strong start to 2025.

Carnival is still experiencing high demand as a pushback from lockdown, and that’s not going to last forever. The current increased demand illustrates consumer confidence in Carnival as well as high overall interest in its product, indicating an enduring business model that can withstand short-term challenges and bounce back. Five years from now, demand is likely to be completely normalized, but still strong. In other words, it should be similar to its pre-pandemic performance.

How is Carnival Cruise Line doing financially?

Carnival lifted its 2024 adjusted net income guidance by $275 million to $1.55 billion, compared with FactSet’s call for $1.37 billion. The company forecast third quarter adjusted net income to increase 35% to $1.58 billion, ahead of Wall Street’s expectation of $1.54 billion.

Why is Carnival Cruise Line stock crashing?

Pricing May Be an Issue. Carnival, Norwegian Cruise Line Holdings, and Royal Caribbean Group stocks were all falling Friday after an analyst wrote that the cruise lines are losing some pricing power.