BKNG Stock – Carnival Posts $2 Billion Loss for the Quarter. Investors Are Looking Ahead to Bookings.
said Wednesday that it lost $2 billion in the first quarter, as the cruise-line operator has been virtually shut down, but the company said that bookings are accelerating amid “significant pent-up demand.”
Shares of Carnival (ticker: CCL) were higher on Wednesday, gaining $1.20, or 4.2%, to $29.80, as investors focused on bookings activity and not on the company’s large losses.
In a client note, Truist analyst Patrick Scholes wrote that the adjusted loss of $2 billion in the quarter was wider than “a consensus of a loss of $1.730 billion and our projection of a loss of $1.555 billion.”
“Despite the ‘miss’ and similar to misses in previous quarters and continued delays in sailings, we strongly suspect investors will not give this too much thought,” he wrote.
In its first-quarter update, Carnival, the leader in the cruise-line industry, said that its monthly cash burn was better than expected in the period, at $500 million, versus guidance of $600 million in January. The company also said that it expected its monthly cash burn to average $550 million in the first half of 2021.
Carnival ended the first quarter with $11.5 billion of cash and equivalents. The company has raised $23.6 billion through debt and equity sales since March 2020. That has swelled the company’s debt and shares outstanding.
Carnival said it had a first-quarter net loss of $2 billion based on generally accepted accounting principles (GAAP) and an adjusted net loss of $2 billion in the period.
CEO Arnold Donald said in a statement: “Booking volumes are accelerating. During the first quarter of 2021 they were approximately 90% higher than volumes during the fourth quarter of 2020 reflecting both the significant pent up demand and long-term potential for cruising.”
“Cumulative advanced bookings for full year 2022 are ahead of a very strong 2019 as of March 21, 2021. The company highlights this level of bookings was achieved with minimal advertising and marketing,” he added.
The company is undertaking a phased resumption of cruise travel, with Carnival’s Aida division resuming guest cruise operations in late March. It plans to restart cruises from international ports in the coming months, but Carnival and other cruise-line operators are awaiting guidance from the U.S. Centers for Disease Control and Prevention about resuming sailings from U.S. ports.
Analysts don’t expect that to occur until sometime in the third quarter.
The company did not say anything about possibly requiring vaccinations for sailings out of U.S. ports, Scholes noted. Rival
Norwegian Cruise Line Holdings
(NCLH) has proposed to the CDC to resume sailings from U.S. ports in July with everyone on board, both passengers and crew, fully vaccinated.
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