Released on September 29, 2023, Carnival Corp (CCL, Financial) reported strong third quarter 2023 earnings, demonstrating a robust financial performance that exceeded expectations. The company's U.S. GAAP net income stood at $1.07 billion, or $0.79 diluted EPS, and adjusted net income of $1.18 billion, or $0.86 adjusted EPS, exceeded the June guidance range. The company's adjusted EBITDA of $2.22 billion also surpassed the June guidance range.
Third quarter revenues hit an all-time high of $6.9 billion, reflecting the company's resilience amidst a challenging operating environment. The strength in close-in demand enabled the company to increase its net per diems guidance for full year 2023 by one percentage point to up approximately 7.0 percent compared to 2019 (in constant currency).
Booking volumes during the third quarter and the month of September continued at significantly elevated levels. The company's cumulative advanced booked position for full year 2024 is well above the high end of the historical range at higher prices (in constant currency) than 2023 levels. Total customer deposits reached a third quarter record of $6.3 billion.
“We delivered over $1 billion to the bottom line with revenue reaching an all-time high” commented Carnival Corporation & plc’s Chief Executive Officer Josh Weinstein. “Both revenue and earnings significantly exceeded expectations this quarter enabling us to take up expectations for the year.”
For the first time since the resumption of guest cruise operations, U.S. GAAP net income turned positive, generating $1.07 billion, or $0.79 diluted EPS, marking a significant milestone. Adjusted net income of $1.18 billion, or $0.86 adjusted EPS, exceeded the June guidance range of $0.95 billion to $1.05 billion.
Adjusted EBITDA of $2.22 billion also exceeded the June guidance range of $2.05 billion to $2.15 billion. Third quarter revenues hit an all-time high of $6.9 billion. While gross margin yields were down compared to 2019, net yields (in constant currency) exceeded strong 2019 levels.
For the full year 2023, the company expects adjusted EBITDA of $4.1 billion to $4.2 billion, within the June guidance range, despite the $125 million net unfavorable impact from fuel price and currency from June guidance. Occupancy of 100 percent or higher is expected, with net per diems (in constant currency) up approximately 7.0 percent compared to 2019, one percentage point higher than the midpoint of June guidance, based on the continued strength in close-in demand.
For the fourth quarter of 2023, the company expects adjusted EBITDA of $800 million to $900 million, net yields (in constant currency) up mid-single digits compared to 2019 with occupancy in line with historical levels and net per diems (in constant currency) up 7.0% to 8.0% compared to 2019.
The company reduced its debt by nearly $4 billion from its peak in the first quarter of 2023 and ended the third quarter with $5.7 billion of liquidity. The third quarter generated cash from operations of $1.8 billion and adjusted free cash flow of $1.1 billion. The company expects continued growth in adjusted free cash flow to be the driver for paying down debt over time.
Carnival Corporation & plc is the largest global cruise company, and among the largest leisure travel companies, with a portfolio of world-class cruise lines – AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises (Australia), P&O Cruises (UK), Princess Cruises, and Seabourn.
