On September 29, 2023, Carnival PLC (CUK, Financial) released its third-quarter earnings report for 2023, demonstrating strong earnings momentum. The company reported a U.S. GAAP net income of $1.07 billion, or $0.79 diluted EPS, and an adjusted net income of $1.18 billion, or $0.86 adjusted EPS, exceeding the June guidance range. The adjusted EBITDA of $2.22 billion also surpassed the June guidance range.
Financial Highlights
Carnival PLC (CUK, Financial) reported an all-time high third-quarter revenue of $6.9 billion. The company's cumulative advanced booked position for the full year 2024 is well above the high end of the historical range at higher prices than 2023 levels. Total customer deposits reached a third quarter record of $6.3 billion. The company also reduced its debt by nearly $4 billion from its peak in the first quarter of 2023 and ended the third quarter with $5.7 billion of liquidity.
We delivered over $1 billion to the bottom line with revenue reaching an all-time high," commented Carnival Corporation & plc’s Chief Executive Officer Josh Weinstein. "Both revenue and earnings significantly exceeded expectations this quarter enabling us to take up expectations for the year."
Performance Analysis
For the first time since the resumption of guest cruise operations, U.S. GAAP net income turned positive, marking a significant milestone. The company's outperformance was driven by strength in demand, with both the North America and Australia segment and Europe segment equally outperforming expectations. The company's demand generation efforts are working across all regions, achieving quarterly net per diems well in excess of 2019 levels.
Outlook for 2023
For the full year 2023, the company expects an adjusted EBITDA of $4.1 billion to $4.2 billion, within the June guidance range, despite the $125 million net unfavorable impact from fuel price and currency from June guidance. The company also expects fuel consumption per available lower berth day (“ALBD”) for the full year 2023 to be nearly 16 percent lower than 2019, better than previously expected.
Debt Management and Capital Activity
Carnival Corporation & plc Chief Financial Officer David Bernstein noted, "We are accelerating our debt repayment efforts and aggressively managing down our interest expense. In just the last six months, we have reduced our debt balance by over 10 percent or nearly $4 billion. With improving performance, growing operating cash flows and $5.7 billion of liquidity, we are on a path to end the year with less than $31 billion of debt."
Other Highlights
Other recent highlights include Carnival Corporation being named one of America’s Best Employers for Women by Forbes for the second year. The company also continues to expand next-generation internet across its fleet with the installation of SpaceX’s Starlink on Costa Cruises, Cunard and P&O Cruises (UK) ships, with plans for all of the company’s capacity to have Starlink capability by the end of the first quarter of 2024.
