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Carnival Corporation & plc (NYSE: $CCL) Crushes Q4 And FY23 Earnings

Carnival Corporation & plc Logo

Carnival Corporation & plc (NYSE: CCL) offers year-round cruises in the Caribbean, Mexico, and The Bahamas. The company also operates seasonal cruises in Alaska, New England, Europe, Canada, Hawaii, and Bermuda. Additionally, the company offers year-round cruises in Australia.

It is currently the world’s biggest cruise line operator with 87 ships under nine brands that include the Princess, popularly known as the Love Boat, and Queen Mary 2, the world’s biggest ocean liner when it launched, which features a planetarium.

Carnival Corporation Reports Record Revenue

Carnival Corporation released its Q4 and FY23 earnings report on Thursday, December 21, 2023. Before the report came out, analysts were predicting an EPS of -$0.13 for Q4. They also predicted that the company would report revenue of $5.28 billion, representing a 37.5% Y/Y increase.

However, the company beat revenue expectations with a reported revenue of $5.4 billion. In FY23, the company reported a new all-time high revenue of $21.6 billion. Additionally, the company said that booking volumes for the holiday season reached an all-time high.

Total customer deposits in Q4 reached a record $6.4 billion, surpassing the previous record $5.1 billion in Q4 2022 by 25%. Its reported adjusted EPS of -$0.07, or a net loss of $90 million, far exceeded the analysts’ prediction.

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Financial Health

The company reported that it had made $6 billion in debt payments, ending FY23 with a debt of slightly over $30 billion. That was $3 billion less than their forecast during the March 2023 conference call.

According to the report, the company generated $4.3 billion from operations, and its adjusted free cash flow stood at $2.1 billion for FY23. Those funds will be critical to rebuilding its financial strength.

It also reported that it had $5.4 billion in liquidity, which included cash and loans available under its revolving credit facility. The company has also amended an agreement with one of its credit card processors, which will see it receive an additional $800 million in Q1 2024.

Stock Performance

CCL stock rose 6.20% on December 22, 2023, during early morning trading. Trading at around $19.19 per share. The stock has had an outstanding performance in 2023, rising 140.78% YTD. In the past month, the stock is up 32.62%.

CCL Stock Performance

CCL Stock Forecast

In the outlook section, Carnival Corporation projects that net yields would rise to 16.5% in Q1 compared to the same time last year. It also projected that occupancy would rise to historic highs. Carnival projected occupancy will increase by 4.6% from the previous year’s quarter. It also projected an adjusted loss of -$0.22 per share for Q124.

For FY24, the company projects net yields will rise 8.5% compared to 2022, while occupancy will increase to historic levels. The company expects occupancy to rise 5.4% in FY24, with an adjusted EPS of -$0.93 for the year.

Based on its recent performance and strengthening financial situation, analysts have given CCL stock a strong buy rating. They predict a high of $25 and a low of $11. Their average price forecast for CCL is $19.2, which is a 0.47 based on its last price.

Should You Buy CCL Stock?

The Carnival Corporation has worked hard to improve its financial situation. Additionally, it has a lot of liquidity and free cash flow, which will undoubtedly be helpful for the company’s marketing efforts. It has also reported a rise in bookings, expecting to reach record highs in 2024.

Consequently, the stock will continue rising as investor optimism increases based on the expected strong performance. The analysts’ strong buy rating for CCL is accurate, based on the current financial figures and reports from Carnival Corporation.

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