Carnival Corp. had a strong second quarter, achieving record revenue, operating income, and booking levels. The net income for the quarter was reported at $92 million, marking a significant improvement from the previous year. However, when compared to the pre-pandemic period in 2019, there was still a gap of approximately $350 million due to higher interest expenses incurred by the company during the pandemic. Interest expenses soared to $450 million in the second quarter, a steep increase from $54 million in Q2 2019.
CEO Josh Weinstein acknowledged the challenges ahead, stating that the company still has “a lot of work to do.” The loans taken during the pandemic to sustain the business while cruises were suspended contributed to the increased interest expenses, making it difficult for Carnival Corp. to reinstate dividends at this time. Weinstein’s candid assessment of the situation reflects a sense of realism amidst the company’s financial success in the quarter.
Weinstein mentioned that Carnival Corp.’s booking position for the remainder of the year is at its highest, both in terms of price and occupancy. Despite not providing specific percentages, he highlighted that the booking curve in North America is at its longest ever, while in Europe, it is the most extended in the past 15 years. These insights into the booking trends reveal a positive outlook for the company in terms of future revenue and customer engagement.
With the robust performance in the second quarter, Carnival Corp. raised its expectations for full-year net yield and adjusted net income. The company is seeing continuous strong demand, with Weinstein noting an “unprecedented” interest in bookings for 2025 and beyond. CFO David Bernstein also expressed confidence in the ongoing positive trends, anticipating a continuation of the success witnessed in the third quarter.
While Carnival Corp. has demonstrated remarkable financial achievements in the second quarter, it is crucial to recognize the underlying challenges and uncertainties that the company is still grappling with. The record revenue and income figures reflect a positive trajectory for the business, but the higher interest expenses and the need for further strategic actions emphasize the complexity of the current operating environment. Amidst the celebrations of success lies a call for continued vigilance and proactive measures to navigate the evolving landscape of the cruise industry.