Carnival shares dip despite record third quarter, upgraded guidance

30th Sep 2024 15:08

(Sharecast News) - Shares in Anglo-American cruise giant Carnival were in the red on Monday afternoon, even after it reported record-breaking financial results for the third quarter, surpassing its earlier guidance and raising its full-year outlook for the third time.

The FTSE 250 company posted net income of $1.7bn, a 60% increase compared to the same period in 2023.

Adjusted net income exceeded forecasts by $170m, reaching $1.8bn.

Carnival's third-quarter revenue also hit an all-time high of $7.9bn, up $1bn from last year.

Operating income for the quarter reached a record $2.2bn, exceeding 2023 levels by $554m.

The company put its strong performance down to robust demand and cost-saving initiatives, which allowed it to increase its full-year 2024 adjusted EBITDA guidance to $6bn - a 40% rise compared to 2023.

Carnival also reported record advance bookings for 2025, with prices outperforming the prior year, reflecting strong demand for future sailings.

The firm said it expected continued strength in the fourth quarter, forecasting adjusted EBITDA of $1.14bn, up 20% from the prior year.

Carnival said it was confident in its long-term outlook, noting that its cumulative advance bookings for 2025 were ahead of 2024's record, adding that it also achieved record booking volumes for 2026 sailings in recent months.

"We delivered a phenomenal third quarter, breaking operational records and outperforming across the board," said chief executive officer Josh Weinstein.

"Our strong improvements were led by high-margin, same-ship yield growth, driving a 26% improvement in unit operating income, the highest level we have reached in 15 years.

"We are poised to deliver record operating performance for full year 2024, with adjusted EBITDA now expected to cross $6bn and adjusted return on invested capital to be approximately 10.5%."

Weinstein said strong demand enabled the company to increase its full year yield guidance for the third time this year, adding that it had also improved its cost guidance, driving more revenue to the bottom line.

"Looking forward, the momentum continues as our enhanced commercial execution drives demand well in excess of our capacity growth, leaving us well positioned with an even stronger base of business for 2025, a record start to 2026 and firmly on the path toward our 'SEA Change' targets."

At 1508 BST, shares in Carnival Corporation & plc were down 4.95% at 1,207p.

Reporting by Josh White for Sharecast.com.