Carnival Corp. reroutes cruises for 12 ships from the Red Sea

This change is expected to have an adjusted earnings per share impact of 7 cents to 8 cents for full year 2024, with the vast majority of the impact in the second quarter.

No impact on bookings

Carnival Corp. added it has not seen an impact on booking trends due to the Red Sea situation and has no other Red Sea transits until November.

Wave bookings exceed expectations

The company also said it has experienced an early and robust start to wave season, exceeding expectations, with booking volumes since November hitting an all-time high.

For 2024, Carnival Corp. continues to have the best booked position on record, with both pricing (in constant currency) and occupancy considerably higher than 2023 levels. The first half of 2024 is almost fully booked.

The company believes its continued strong bookings momentum is expected to deliver outperformance during the year, offsetting the Red Sea rerouting impact.

Brokerage reaction

In a note, William Blair & Co. left its full-year earnings per share estimate for CCL unchanged at 96 cents — compared to the consensus estimate of $1 — with a slightly lower revised projection for Q2 offset by increased estimates for the second half of the fiscal year. 

The brokerage reiterated its 'outperform' (buy) rating at a multiple of 17.1 times its 2024 EPS estimate. 

Notes redemption

In addition, Carnival Corp. announced the redemption of the outstanding $571m 9.875% second-priority senior secured notes due 2027, eliminating all of the remaining second lien debt outstanding.

This redemption is consistent with December guidance, using its cash flow strength to reduce interest expense and leverage along its path to investment grade credit metrics.