Executive Summary
Carnival Corporation plc (CCL) reported tremendous financial performance in the second quarter of 2024, achieving record revenues of $5.78 billion, a year-over-year increase of 17.72%, reflecting robust demand and an optimized yield strategy. This performance exceeded management's guidance across key metrics, including operating income and customer bookings. CEO Josh Weinstein noted that yields improved by over 12% compared to the previous year, with strong demand trends driving further optimism for the second half of 2024. The robust booking position for 2025, with customer deposits exceeding $8 billion, underscores a strong consumer sentiment and capacity to increase ticket prices. Management is focused on maintaining this trajectory while enhancing operational efficiency and balancing cost management with strategic investments.
Key Performance Indicators
QoQ: 103.64% | YoY:227.49%
QoQ: 142.99% | YoY:122.60%
QoQ: 142.71% | YoY:122.69%
Key Insights
**Revenue Performance:** Revenue for Q2 2024 reached $5.78 billion, a 17.72% increase year-over-year and a 6.94% increase from Q1 2024.
**Gross Profit:** Gross profit totaled $1.35 billion, with a gross profit margin of 23.3%. Despite this being a decline from the previous quarter, it demonstrates a solid foundation for profitability.
**Net Income:** Net income stood at $92 million, marking a substantial 122.6% increase year-over-year, with diluted EPS at $0.0724, up 142.71% from Q1 2024.
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Financial Highlights
Revenue Performance: Revenue for Q2 2024 reached $5.78 billion, a 17.72% increase year-over-year and a 6.94% increase from Q1 2024.
Gross Profit: Gross profit totaled $1.35 billion, with a gross profit margin of 23.3%. Despite this being a decline from the previous quarter, it demonstrates a solid foundation for profitability.
Net Income: Net income stood at $92 million, marking a substantial 122.6% increase year-over-year, with diluted EPS at $0.0724, up 142.71% from Q1 2024.
Operating Income: Operating income for the quarter was $560 million, representing a 227.49% increase from the prior year.
Cash Flow: Cash provided by operating activities was approximately $2 billion, with free cash flow reported at $720 million, indicating strong liquidity and cash generation capabilities.
Debt Metrics: The total debt level is approximately $30.65 billion, with a leverage ratio (net debt to EBITDA) expected to improve towards 4.5 times by the end of 2024, showing progress towards investment-grade rating goals.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
5.78B |
17.72% |
6.94% |
| Gross Profit |
1.35B |
-7.22% |
23.99% |
| Operating Income |
560.00M |
227.49% |
103.64% |
| Net Income |
92.00M |
122.60% |
142.99% |
| EPS |
0.07 |
122.69% |
142.71% |
Key Financial Ratios
operatingProfitMargin
9.69%
operatingCashFlowPerShare
$1.61
freeCashFlowPerShare
$0.57
Management Commentary
1. Operational Improvements: Management emphasized the strong operational improvements driving profitability. Josh Weinstein stated, "We hit record second quarter adjusted EBITDA, roughly $150 million more than guidance," highlighting the effectiveness of operational strategies.
2. Future Growth: Weinstein noted, "Our current booking trends are a testament to that. We are hitting records on top of previous records, which clearly tells us the strength of demand we have been building is continuing into next year and beyond."
3. Capacity and Efficiency: In discussing efficiencies, CFO David Bernstein remarked, "We've taken proactive steps, such as prepaying $1.6 billion of secured term loan facilities, which simplifies our capital structure and reduces interest expense."
"We expect to deliver consistent mid-single-digit per diem growth through the balance of the year, which would mark eighth consecutive quarters that we are achieving mid-single-digit or higher per diem improvements." - Josh Weinstein
— Josh Weinstein
"The unprecedented level of demand for 2025 sailings coupled with flat capacity growth next year translates into meaningful pricing power." - David Bernstein
— David Bernstein
Forward Guidance
Looking ahead, management raised its full-year guidance for net income by $275 million, now targeting $1.55 billion for 2024, fueled by strong demand trends and improved pricing power. The expected mid-single-digit per diem growth reflects ongoing momentum, with management expressing confidence in achieving ROIC above 10% this year. Key factors to monitor include future booking strength, pricing strategies, and operational efficiencies moving into Q3 and Q4 2024, particularly as the company introduces Celebration Key, which promises to enhance revenues and customer experience.