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Carnival stock sinks toward a 30-year low as losses and revenue misses keep piling up


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Shares of Carnival Corp. sank to a post-pandemic low after the cruise operator reported yet another wider-than-expected loss and sales miss, even as capacity improved to 92%.

 

The stock CCL, -18.51%, which was the biggest decliner in the S&P 500 index SPX, 0.74%, plunged 19.1% in morning trading, to break below the previous post-pandemic closing low of $7.97 on April 2, 2020. It was headed for the lowest close since October 1992.

 

Carnival reported a net loss for the fiscal third quarter to Aug. 31 that narrowed to $770 million, or 65 cents a share, from a loss of $2.84 billion, or $2.50 a share, in the same period a year ago.

 

Total revenue soared nearly eight-fold, to $4.31 billion from $546 million, as available lower berth days (ALBD) improved to represent 92% of total fleet capacity from 17%, but was well below the FactSet revenue consensus of $4.90 billion.

 

Passenger ticket revenue grew nearly nine-fold to $2.60 billion, but missed the FactSet consensus of $3.10 billion, while onboard and other revenue increased seven-fold to $1.71 billion but was below expectations of $1.81 billion.

 

The company has now reported a loss for every quarter since the fiscal second quarter of 2020, which ended in May, with losses wider than expected in all but one of those quarters. Revenue has now missed expectations for 10 straight quarters.

 

“We are continuing to close the gap to 2019 as we progress through the year, building occupancy on higher capacity and lower unit costs,” said Chief Executive Josh Weinstein.

 

The company said cumulative advance bookings for the fourth quarter are below the historical range at lower prices, due primarily to future cruise credits (FCCs), while cumulative advance bookings for 2023 are slightly above the historical range at “considerably higher” prices.

 

ALBDs for the third quarter were 21 million, and are expected to be 22 million for the fourth quarter. For last year’s third quarter, ALBDs were 3.8 million.

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3 minutes ago, Itchy&Scratchy said:

so, how many shares do I need to buy in order to get Princess OBC?

 

If you care to, you can buy 150 shares while they are low, and when, or should I say IF the price goes back up, you can sell the extra 50 shares to pay off the others.

You'll either end up with 100 shares for little or no money, or 150 shares of worthless stock.

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12 minutes ago, Itchy&Scratchy said:

so, how many shares do I need to buy in order to get Princess OBC? How much is the OBC? Will I get it if the cruise is 50 days away?

When you buy them, you can send in your statement, showing name, address, quantity of shares bought. Mark out the account number.  I email attach the statement.

 

SBPCL@Princesscruises.com

 

 

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Yeah, our investment on CCL & NCL is down $500 from our initial investment in June.

But we have already gotten $550 in OBC with $100 more in Dec & $250 more next spring so I'm good.

They had certainly been a little up & a little down since then but admittedly this one was a little painful to see. 

 

Edited by KKB
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It's a good time to buy if you don't mind the risk.  I could see a few more ships being sold in the next year or so as the value of used ships is recovering from scrap metal pricing during the pandemic - this could be used to reduce their debt or avoid taking on more debt at much higher interest rates.  Analysts expect a return to profitability later next year given current issues in eastern europe, fuel fluctuations, global economic slowdown.  That could be optimistic, but there isn't much further for CCL to fall. 

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1 hour ago, PacnGoNow said:

When you buy them, you can send in your statement, showing name, address, quantity of shares bought. Mark out the account number.  I email attach the statement.

 

SBPCL@Princesscruises.com

 

 

We cruise on 5th November with Princess. If we buy now what are the chances of being able to claim obc for that cruise?

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I bought some cruise line stocks 6 months ago because I thought the worse was behind for cruise lines.  Mistake.  I now think one or more major cruise line bankruptcies is more likely than not in 2023.  Consider this..... CCL's share price is now lower than its Covid low.

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3 minutes ago, sandancer said:

We cruise on 5th November with Princess. If we buy now what are the chances of being able to claim obc for that cruise?

 

You just need to submit a statement showing that you own the stock. So if you buy today, and get the September statement with it listed you will be able to request for the OBC through princess via email. The last shareholder request I sent to Princess took 2 days to post.

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19 minutes ago, cruisingrob21 said:

It's a good time to buy if you don't mind the risk.  I could see a few more ships being sold in the next year or so as the value of used ships is recovering from scrap metal pricing during the pandemic - this could be used to reduce their debt or avoid taking on more debt at much higher interest rates.  Analysts expect a return to profitability later next year given current issues in eastern europe, fuel fluctuations, global economic slowdown.  That could be optimistic, but there isn't much further for CCL to fall. 

There is a very real possibility that CCL (and RCCL and NCL) could end up in some sort of bankruptcy restructuring at which point the stock will go to zero.  I would not hold CCL...if you are looking to get a OBC just buy the stock and then dump it.  The annual interest payments on the debt these cruise lines have amassed is going to be close to half of their net income in their best years ever, and a global recession has already started (comments made by CEO of FEDEX are all telling...he has access to data that can predict a recession before anyone else even knows about it).   On top of those two factors we are in a rising rate environment and most sources believe they will peak in 2023 and remain there well into 2024...when CCL needs to issue new debt to cover the old debt, these interest payments will go up.

 

All of these cruise lines are incorporated in countries that have very lax consumer protections, so it would be wise to use up any gift cards and free cruise credits asap.

Edited by malba2366
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1 hour ago, cruisingrob21 said:

It's a good time to buy if you don't mind the risk.  I could see a few more ships being sold in the next year or so as the value of used ships is recovering from scrap metal pricing during the pandemic - this could be used to reduce their debt or avoid taking on more debt at much higher interest rates.  Analysts expect a return to profitability later next year given current issues in eastern europe, fuel fluctuations, global economic slowdown.  That could be optimistic, but there isn't much further for CCL to fall. 

 

I think it is optimistic.  Analysts we were listening today are saying that cruise lines are going to have a very hard time filling their ships as the recession grips the nation and world and inflation continues to rise along with interest rates.  Families and many retirees are going to have a lot less discretionary funds to spend on cruising and the cruise lines have not even come close to recovering from the pandemic.

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1 hour ago, sandancer said:

We cruise on 5th November with Princess. If we buy now what are the chances of being able to claim obc for that cruise?

I got OBC added same day last 2 times (Tuesday & today) when I faxed it in. They will accept purchase confirmation, don't need to wait for month end stmt 

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4 hours ago, CineGraphic said:

Shares of Carnival Corp. sank to a post-pandemic low after the cruise operator reported yet another wider-than-expected loss and sales miss, even as capacity improved to 92%.

 

The stock CCL, -18.51%, which was the biggest decliner in the S&P 500 index SPX, 0.74%, plunged 19.1% in morning trading, to break below the previous post-pandemic closing low of $7.97 on April 2, 2020. It was headed for the lowest close since October 1992.

 

Carnival reported a net loss for the fiscal third quarter to Aug. 31 that narrowed to $770 million, or 65 cents a share, from a loss of $2.84 billion, or $2.50 a share, in the same period a year ago.

 

Total revenue soared nearly eight-fold, to $4.31 billion from $546 million, as available lower berth days (ALBD) improved to represent 92% of total fleet capacity from 17%, but was well below the FactSet revenue consensus of $4.90 billion.

 

Passenger ticket revenue grew nearly nine-fold to $2.60 billion, but missed the FactSet consensus of $3.10 billion, while onboard and other revenue increased seven-fold to $1.71 billion but was below expectations of $1.81 billion.

 

The company has now reported a loss for every quarter since the fiscal second quarter of 2020, which ended in May, with losses wider than expected in all but one of those quarters. Revenue has now missed expectations for 10 straight quarters.

 

“We are continuing to close the gap to 2019 as we progress through the year, building occupancy on higher capacity and lower unit costs,” said Chief Executive Josh Weinstein.

 

The company said cumulative advance bookings for the fourth quarter are below the historical range at lower prices, due primarily to future cruise credits (FCCs), while cumulative advance bookings for 2023 are slightly above the historical range at “considerably higher” prices.

 

ALBDs for the third quarter were 21 million, and are expected to be 22 million for the fourth quarter. For last year’s third quarter, ALBDs were 3.8 million.

I think this looks better than at first glance. They had 22 million bed days so an average of about $120 per bed per day. This means they lost $30 per bed per day. So they need that increase or they need to have 5 million more bed days.  They raised the drink package by $20/day. They are shrinking the covid areas so that could add more bed days. Also the FCCs are expiring.  I wonder what the cash position change was. Long term, cash tells you more than earnings since you can lose "earnings" but you shut down when you run out of cash.

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At this price, it's pretty low risk if one is cruising some.  Remember that the OBC one gets are tax free and if the stock does go down some, the loss can be used to reduce ones taxes if one sells it as a loss, especially if one sells it with less than a year of owning the shares.  

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4 hours ago, Redwing55 said:

At this price, it's pretty low risk if one is cruising some.  

You’re right. I consider large deposits and cruises paid in full more than 90 days prior to sailing to be a greater risk. At least CCL losses can be netted against other capital gains (if there are any this year). Unused FCCs for cancelled cruises are pretty much worthless. 

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I'm no stock analyst by any means, but I would think as the covid vaccine restrictions are being lifted left and right.....There will be more and more people cruising, thus increasing revenue.   Gone are the days of 40% capacity sailings.

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17 minutes ago, cruzin4us said:

I'm no stock analyst by any means, but I would think as the covid vaccine restrictions are being lifted left and right.....There will be more and more people cruising, thus increasing revenue.   Gone are the days of 40% capacity sailings.

You are right. The financials say they are close to making a operating profit. Debt servicing may be another issue.

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8 hours ago, cruisingrob21 said:

Analysts expect a return to profitability later next year given current issues in eastern europe, fuel fluctuations, global economic slowdown. 

Also a number of FCC will expire worthless 12/31/22. Think of all those cruisers who didn't monitor the order their FCC were applied

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13 hours ago, Redwing55 said:

At this price, it's pretty low risk if one is cruising some.  Remember that the OBC one gets are tax free and if the stock does go down some, the loss can be used to reduce ones taxes if one sells it as a loss, especially if one sells it with less than a year of owning the shares.  

We are taking the risk. We have one Princess and two P&O cruises booked and are considering another Cunard. We will get £150 obc for each so it’s a risk we are willing to take. 

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