Carnival Corp. (CCL) Q2 2023 Earnings Call Transcript Summary
Carnival Corp. (CCL) Q2 2023 Earnings Call Transcript
Bullish Points:
1. Net yields surpassing 2019 strong levels.
2. Operating income, cash from operations, and adjusted free cash flow were all positive.
3. All-time highs for bookings and customer deposits.
4. Phenomenal wave season.
5. Outperformance in the second quarter for revenue, adjusted EBITDA, and the bottom line.
6. Net per diems in constant currency were up 7.5% over 2019 in the second quarter.
7. Raised expectation for net per diems in the second half by over 2.5 points.
8. Expecting adjusted EBITDA of $4.1 billion to $4.25 billion, above the high end of prior guidance range.
9. Booking volumes reached an all-time high in the second quarter, 17% higher than 2019.
10. Demand for European brands has continued to strengthen.
Bearish Points:
1. Costa's capacity being reduced by 36% compared to pre-pause expectations.
2. Loss of Saint Petersburg as a marquee destination due to suspension of cruises to Russia.
3. Adjusted cruise costs without fuel per ALBD for 2023 expected to be up 10% to 11% compared to 2019.
4. Slower-than-expected ramp-down in inflationary pressures.
5. Cost drag due to step up in occupancy.
6. No assumption of returning to China in 2026 targets.
7. Ukraine situation not expected to reverse, affecting high-yielding trades.
8. Not planning on China.
9. Energy security concerns.
10. More dry docks in 2024.
In conclusion, Carnival Corp. has shown strong performance in Q2 2023 with record-high bookings, customer deposits, and positive financial results. The demand for European brands continues to strengthen, and the company expects adjusted EBITDA to be above the high end of prior guidance range. However, there are concerns regarding Costa's reduced capacity, suspension of cruises to Russia, and the ongoing Ukraine situation. Additionally, the company is not planning on returning to China and faces energy security concerns. Overall, the company's future performance will depend on its ability to navigate these challenges while capitalizing on its strengths.
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