Carnival expects to hit core earnings as strong demand dampens high costs
(Reuters) – Carnival Corp CCL.N, CCL.L forecast core profit for the current quarter on Friday as the cruise line resumes full operations even amid decades-high inflation and soaring food prices. fuel costs continue to bite.
Shares of the company, which have fallen 52% this year, rose about 10% as Carnival also said it expects bookings for all of 2023 to be at the top of their historic range and benefit from higher prices.
“With respect to the threat of a global recession, while not recession proof, our business has proven to be recession proof time and time again,” Chief Executive Arnold Donald said. during a post-earnings call.
The US Centers for Disease Control and Prevention (CDC) removed its COVID-19 advisory against cruise travel in March, nearly two years after introducing a warning scale.
The CDC’s decision has encouraged more people to travel on cruises, boosting bookings for companies like Carnival, which now has the majority of its fleet back on the water.
On Friday, 91% of the company’s capacity was in guest cruise service as part of its ongoing return to service.
Carnival expects positive adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter, compared to the negative $900 million it posted in the second quarter. The company’s EBITDA has been negative since the start of the pandemic.
However, he still expects a loss for the year as he faces a setback in inflation and soaring fuel prices which have been made worse by Moscow’s invasion of Ukraine.
The company’s revenue soared to $2.40 billion in the second quarter from $50 million a year earlier, but below analysts’ average estimate of $2.77 billion, according to IBES data. from Refinitiv.
Excluding items, the company posted a loss of $1.64 per share, better than estimates of $1.17.
Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Maju Samuel
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