Carnival Stock Below $10

[PUNKT2]

16 hours ago, BlerkOne said:

Carnival Corp needs 25 ships sailing at 100%

 

https://www.seatrade-cruise.com/news/carnival-corp-needs-25-ships-sailing-full-occupancy-break-even

 

Generally, the break-even occupancy for any Carnival ship is in the 30% to 50% range, depending its size, according to CFO David Bernstein.

Two problems here. First, given these articles are from just a few months after they stopped sailing, and they've had to raise many billions of dollars since then, so have significantly higher debt and the interest payments that go with them, those numbers are not accurate two years later. Second, there's a difference between a ship breaking even and the company doing so. The ship costs don't consider all the shoreside staff salaries, marketing costs, corporate office leases, etc - so even if every ship is at a break-even point, the company would likely still be losing a lot of money.  

[PUNKT2]

10 hours ago, ew101 said:

This came from this report ROYAL CARIBBEAN GROUP REPORTS FIRST QUARTER 2022 RESULTS AND PROVIDES A BUSINESS UPDATE (yahoo.com)  ..."The Group expects to operate approximately 10.3 million Available Passenger Cruise Days (APCD) for the second quarter with load factors of 75% to 80%. The Group also expects cash flow from ships in operation to be positive in the second quarter. Operating cash flow significantly improved throughout the first quarter and is turning positive in April."

 

The 30-50% was possibly for a brand new 3500+ passenger mega ship which has similar fixed operating costs to a smaller one.  But we are talking fleet average here.  

That 75-80% number makes much more sense given everything that's changed over the last two years since those original aritcles were posted. But even at that occupancy, the key to the quote above is what I was refering to in my previous post: "cash flow from ships in operation to be positive". I *believe* that means that if a ship is sailing, that ship is bringing in more money that it costs to operate - but I don't know that it means each ship is generating enough positive cash flow to cover all the corporate costs?

[mz-s]

7 hours ago, Illbcruzn4life said:

even if CCL is sailing full how many of those pax are booked with these super cheap rates?

 

On board spend is just as, if not more important I'd say.

 

9 hours ago, BlerkOne said:

Costa capacity is higher now with the delivery of their second LNG ship.

 

Their capacity is higher but they apparently now have too much tonnage, and Carnival doesn't have enough.

[At Sea At Peace]

46 minutes ago, PUNKT2 said:

That 75-80% number makes much more sense given everything that's changed over the last two years since those original aritcles were posted. But even at that occupancy, the key to the quote above is what I was refering to in my previous post: "cash flow from ships in operation to be positive". I *believe* that means that if a ship is sailing, that ship is bringing in more money that it costs to operate - but I don't know that it means each ship is generating enough positive cash flow to cover all the corporate costs?

 

Really good to look at and parse the quotes.  👍  These CEO's and management have become POLS in their selective grammar are true to form inventive and creative word salads.

 

Great discussions.  Wouldn't it be nice to get an honest answer to the real question since the earnings release?  The real question being "how did you still lose almost $4B with current operating revenues of  $4B on 6-month YTD when you lost $4B in the prior comparative period on operating revenues of $75M (million). 

 

Once that is answered without preferential parsing, a follow up with "how are you going to make corporate Net Income in the current summer quarter to end August 30th and, yikes, in the historically weakest quarter to follow ending November 30th?"

 

 

[ew101]

30 minutes ago, At Sea At Peace said:

The real question being "how did you still lose almost $4B with current operating revenues of  $4B on 6-month YTD when you lost $4B in the prior comparative period on operating revenues of $75M (million). 

 

With all the gloom and doom, we have to remember CCL is providing essential services, and is recession-proof.  In the old days, people needed soap, canned soup and shoes.  Now we cannot live without:  Smiling butlers.  Grilled red meat.  Beverage packages, gambling and lying in the sun.   

 

But the new bond interest is real money, as are expensive airfares from Manila and rising fuel costs.  We'll have to see.  

[lostsoulcruiser]

1 hour ago, At Sea At Peace said:

 

 The real question being "how did you still lose almost $4B with current operating revenues of  $4 on 6-month YTD when you lost $4B in the prior comparative period on operating revenues of $75M (million). 

 

 

The last quarterly reports had Carnival as cash flow positive for the quarter, meaning they covered operating cost plus debt interest.  It is a nice start towards recovery.  

The main future difficulty is the ability and cost to refinance their current debt at an affordable interest rate.  It is likely they may have to issue more equity (stock) to reduce the debt which will result in lower stock price.

[Muffin Slayer]

They must really need business.  Just saw an ad on fb from Carnival, saying you can get free cruise with card from any casino.  I think people would rather stay in hotel area with casinos and avoid the troubles with cruise ships for now.

[JT1962]

4 hours ago, CruiseScrooge said:

I don't think you cruise solo. The fares and deals for solo passengers are worse than before covid.

I cruised solo on Splendor for 8 days in May to Alaska for $ 125 (before taxes / port fees) and on Ecstasy for 5 days in June for $ 120 (before taxes / port fees). I am still getting cheap solo offers for Alaska and West Coast cruises, but the airfare is 3-4 times what I paid in May. I do not gamble, so these are not Casino Offers.

[Saint Greg]

29 minutes ago, JT1962 said:

I cruised solo on Splendor for 8 days in May to Alaska for $ 125 (before taxes / port fees) and on Ecstasy for 5 days in June for $ 120 (before taxes / port fees). I am still getting cheap solo offers for Alaska and West Coast cruises, but the airfare is 3-4 times what I paid in May. I do not gamble, so these are not Casino Offers.

 

I don't get anything like that. Nothing close to that. So everyone may not get that. But prior to covid my cheapest 7+ day cruise was $1030 after taxes and port fees (I don't know why people like to quote the pre-tax and port fee price. You're playing into their hand making cruises sound cheaper). That was on Freedom in 2017. In the past year I've booked three in the $600-800 range including an ABC cruise on Horizon.

 

Edited July 1, 2022 by Saint Greg

[Badfinger]

2 hours ago, lostsoulcruiser said:

The last quarterly reports had Carnival as cash flow positive for the quarter, meaning they covered operating cost plus debt interest.  It is a nice start towards recovery.  

The main future difficulty is the ability and cost to refinance their current debt at an affordable interest rate.  It is likely they may have to issue more equity (stock) to reduce the debt which will result in lower stock price.

 

Yeah but they still reported a loss of about $1.60 per share, which was much morse than the estimates of "only" losing $1.10 per share.  That is a huge disappointment and does not give investors a lot of confidence when CCL say they will actually report positive earnings next quarter.  I think their number was something like 0.04 per share.  In the long term, earnings drive the stock price.   So, IMO, investors have been way more than kind keeping CCL at any level above $3 per share these last few years.  And yeah, reports of horrible service on cruises, high fuel, food and wage costs, higher travel costs to get to the ports, and now maybe no more free COVID testing...there is just no good news out there for CCL.   

[At Sea At Peace]

2 hours ago, lostsoulcruiser said:

The last quarterly reports had Carnival as cash flow positive for the quarter, meaning they covered operating cost plus debt interest.  It is a nice start towards recovery.  

The main future difficulty is the ability and cost to refinance their current debt at an affordable interest rate.  It is likely they may have to issue more equity (stock) to reduce the debt which will result in lower stock price.

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/815097/000081509722000054/ccl-20220531.htm

 

Well, there are two particularly interesting components to consider in "their statement" (which I believe they stated they achieved during the quarter), parsed as another member post in this thread so eloquently did, why not state "when?"  The last week?  😉

 

https://www.cruiseindustrynews.com/cruise-news/27750-carnival-corporation-reports-q2-2022-earnings-business-update.html

 

"Cash from operations turned positive in the second quarter of 2022."  Note "in" not "for."

 

1.  Cash Flow for the entire quarter was a negative $1.888 billion.  As presented in the required components of the Statement of Cash Flows, Cash Flows Provided (Used) in Operations was a negative ("used") $1.209 billion,  Investing Activities (Used) was a negative $3.107 billion and Financing Activities (Provided) positive $2.463 billion (and an Exchange Rate Decrease of $0.35 billion).

 

2.  Cash Flow for the quarter, adjusted with a financial perspective of Customer Deposits classified as "short term deb" aka an "interest free" Customer Line of Credit (as some believe it is; collecting Customer Deposits is a tough sell at this point as from Operations), the Operating negative cash flow would have been $2.820 billion.

 

[BlerkOne]

I see RCL and NCL are down by a larger percentage today, and don't think that is an anomaly.  Hmmmm.

[ontheweb]

17 minutes ago, BlerkOne said:

I see RCL and NCL are down by a larger percentage today, and don't think that is an anomaly.  Hmmmm.ca

There is an old saying about a rising tide. Carnival would be better off if those other cruise stocks were rising. It's the entire industry that is in trouble at the moment. Your point that Carnival seems to be doing a little better than the others is not helpful when all three are feeling distress.

[BlerkOne]

3 hours ago, ontheweb said:

There is an old saying about a rising tide. Carnival would be better off if those other cruise stocks were rising. It's the entire industry that is in trouble at the moment. Your point that Carnival seems to be doing a little better than the others is not helpful when all three are feeling distress.

It is more honest and helpful than those who pretend only Carnival is in trouble. Carnival still has more cash on hand than the others.

[ontheweb]

2 hours ago, BlerkOne said:

It is more honest and helpful than those who pretend only Carnival is in trouble. Carnival still has more cash on hand than the others.

Do they also have more debt?

 

And I will repeat what I wrote in my post you quoted-- a rising tide. 

 

The industry including Carnival and its other brands would be better off if the other cruise lines were doing well. 

[At Sea At Peace]

14 hours ago, ontheweb said:

Do they also have more debt?

 

And I will repeat what I wrote in my post you quoted-- a rising tide. 

 

The industry including Carnival and its other brands would be better off if the other cruise lines were doing well. 

 

Good question.  Let's take a look.  Yep, they have more debt as well as more cash.  Also, as with the other two major public lines, their cash is primarily comprised of customer deposits.

 

 

The above is from most recent 10Q or 10K.

 

Below in pre-pandemic 2019 10K's.

 

Edited July 2, 2022 by At Sea At Peace

[BlerkOne]

Second Quarter 2022 Results and Statistical Information
• Revenue increased by nearly 50% in the second quarter of 2022 compared to first quarter 2022, reflecting continued sequential improvement. For
the cruise segments, revenue per PCD for the second quarter of 2022 decreased slightly compared to a strong 2019.
• Onboard and other revenue per PCD for the second quarter of 2022 increased significantly compared to a strong 2019.
• Occupancy in the second quarter of 2022 was 69%, an increase from 54% in the prior quarter.
• Available lower berth days (“ALBD”) for the second quarter of 2022 were 16.7 million, which represents 74% of total fleet capacity, increasing
from 60% in the first quarter of 2022.
• Adjusted EBITDA for the second quarter of 2022 was $(0.9) billion, an improvement over the first quarter of 2022.
• Total customer deposits increased $1.4 billion to $5.1 billion as of May 31, 2022 from $3.7 billion as of February 28, 2022.
• Cash from operations turned positive in April and was positive for the second quarter of 2022.
 

[At Sea At Peace]

4 hours ago, BlerkOne said:

• Cash from operations turned positive in April and was positive for the second quarter of 2022.
 

 

Well, the 10Q financial statements filed with the SEC, including the Statement of Cash Flows, indicate otherwise.

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/815097/000081509722000054/ccl-20220531.htm

 

[BlerkOne]

24 minutes ago, At Sea At Peace said:

 

Well, the 10Q financial statements filed with the SEC, including the Statement of Cash Flows, indicate otherwise.

 

https://www.sec.gov/ix?doc=/Archives/edgar/data/815097/000081509722000054/ccl-20220531.htm

 

 

No, it doesn't. You highlighted a number for 6 months, not for the 2nd quarter.

[BlerkOne]

2 hours ago, CarelessAndConfused said:

 

Their filings for the quarters ended Feb 2022 and May 2022 both show net operating cash flows of over a negative one billion dollars.  What are you looking at when you say that their second quarter was cash flow positive?

https://www.prnewswire.com/news-releases/carnival-corporation--plc-provides-second-quarter-2022-business-update-301574609.html

 

CARNIVAL CORPORATION & PLC PROVIDES SECOND QUARTER 2022 BUSINESS UPDATE

[At Sea At Peace]

17 hours ago, BlerkOne said:

No, it doesn't. You highlighted a number for 6 months, not for the 2nd quarter.

 

Yep, I did.  I can't find a Statement of Cash Flows for the Quarter?  I can derive it however from the February Quarter NEG Cash Flow of $2.524B for 3-months then the May 6-month NEG Cash Flow of $1.888B would impute that the Quarter ended May 2022 would have been a POS of $636M.

 

So, yep.

 

Back to "Customer Deposits" counted as CF from "Operations."

 

3-months ending February, increase 187M.

6-months ending May, increase of $1.611B.

 

So, of the $636M in POS cash flow for the quarter ending in May, $1.424B came from "Customer Deposit" OPERATIONS and the rest was NEG cash flow from Operations of $1.061B.

 

Again, you were correct, and it might be semantics, but have POS cash flow for a quarter with otherwise $1.061B in NEG cash because of "increased Customer Deposits" of $1.424B just seem like a financial operating turnaround to me.  🙄

[BlerkOne]

1 hour ago, At Sea At Peace said:

 

Yep, I did.  I can't find a Statement of Cash Flows for the Quarter?  I can derive it however from the February Quarter NEG Cash Flow of $2.524B for 3-months then the May 6-month NEG Cash Flow of $1.888B would impute that the Quarter ended May 2022 would have been a POS of $636M.

 

So, yep.

 

Back to "Customer Deposits" counted as CF from "Operations."

 

3-months ending February, increase 187M.

6-months ending May, increase of $1.611B.

 

So, of the $636M in POS cash flow for the quarter ending in May, $1.424B came from "Customer Deposit" OPERATIONS and the rest was NEG cash flow from Operations of $1.061B.

 

Again, you were correct, and it might be semantics, but have POS cash flow for a quarter with otherwise $1.061B in NEG cash because of "increased Customer Deposits" of $1.424B just seem like a financial operating turnaround to me.  🙄

 

and now we are in the busy summer season with higher occupancy rates, higher prices, and more ships sailing.

 

The bean counter signing off on most (all?) of the financial information is replacing Arnold Donald when he steps down, so he should have a good idea of what is going on.

 

[BlerkOne]

A 10-Q is required quarterly. Not exactly the same as 10-K, oh well.

 

https://www.carnivalcorp.com/static-files/97d4e1f7-cee5-4668-bf73-28940ff14e83

 

A schedule of debt repayment is in the document, with most debt not being due until after 2026 and I expect Carnival to keep refinancing future debt to keep it manageable.

 

 

[BlerkOne]

1 hour ago, BlerkOne said:

 

The bean counter signing off on most (all?) of the financial information is replacing Arnold Donald when he steps down, so he should have a good idea of what is going on.

 

My bad. I got my bean counters mixed up.

[At Sea At Peace]

2 hours ago, BlerkOne said:

 

and now we are in the busy summer season with higher occupancy rates, higher prices, and more ships sailing.

 

 

Yep, 2 more months of the 'summer season' that they also do not expect to generate net income.

 

And if the customer deposits are used during this period, the the Statement of Cash Flows will invert from such and possibly generate a NEG quarterly cash flow.

 

2 hours ago, BlerkOne said:

 

The bean counter signing off on most (all?) of the financial information is replacing Arnold Donald when he steps down, so he should have a good idea of what is going on.

 

 

"Bean counters" have been regularly disparaged.  Unlike a CEO, they are generally credentialed financial professionals with a stronger mandate to "report the data" and are not usually in the "spin" business as is the CEO with "parse statement counseling" and one "dab of lipstick after another."

 

He's not a true CFO, CPA bean counter.

 

He hasn't been the CCL "bean counter" for the past 5-7 years; rather, the COO.

 

Prior, he was Treasurer.

 

Prior, he was Counsel.

 

Given such, the lipstick will continue to be heavy and the statements well parsed.