Investing in Carnival Cruise Line Stock (CCL)

What you need to know when investing in Carnival Cruise Line

Carnival Corp. (CCL) is one of the largest leisure travel companies in the world. It operates global cruise lines including its leading Carnival Cruise Line brand, as well as Princess Cruises, Seabourn, P&O Cruises, Cunard, and others. The company operates 87 ships sailing to over 700 ports worldwide, catering to nearly 13 million guests each year.

Carnival Corp. and Carnival plc operate a dual-listed company. Carnival Corp. common stock is traded on the New York Stock Exchange under the ticker CCL, and Carnival plc is traded on the London Stock Exchange under the symbol CCL and as an American depositary share (ADS) on the NYSE under the symbol CUK. The two companies operate as if they were a single economic enterprise. They have a single senior executive management team and identical boards of directors. The company began as Carnival Cruise Line, formed in 1972 by Ted Arison. It made an initial public offering (IPO) of 20% of its common stock in 1987. Carnival Corp. was incorporated in Panama in 1974, while Carnival plc was incorporated in England and Wales in 2000. On April 22, 2003, Carnival Corp. and Carnival plc began trading on the NYSE and LSE.

Carnival is headquartered in Miami, Fla. The company's president and chief executive officer (CEO) is Arnold W. Donald. Carnival is classified as a member of the consumer cyclical (consumer discretionary) sector, operating within the hotels, restaurants and leisure industry. The company's direct competitors include cruise line companies including Royal Caribbean Group (RCL), Norwegian Cruise Line Holdings Ltd. (NCLH), and Lindblad Expeditions Holdings Inc. (LIND). It also faces competition from the broader travel and tourism industry, including resorts, casinos, and theme parks. For FY 2020, ended Nov. 30, 2020, Carnival reported a net loss of $10.2 billion on revenues of $5.6 billion.

Key Takeaways

  • Carnival operates global cruise lines including Carnival Cruise Line, Princess Cruises, Seabourn, and others.
  • Its major competitors include Royal Caribbean Group (RCL), Norwegian Cruise Line Holdings Ltd. (NCLH), and Lindblad Expeditions Holdings Inc. (LIND).
  • For FY 2020, ended Nov. 30, 2020, Carnival reported a net loss of $10.2 billion on revenues of $5.6 billion.
  • Carnival in October engaged in both a major junk bond sale and a $2.3 billion refinancing of high-priced debt as it reduces near-term debt maturities and returns ships to water.

Carnival's Recent Developments

  • Bloomberg reported on Oct. 20, 2021 that Carnival had sold a junk bond that was increased by $2 billion in value. Carnival's offering of 7.5-year unsecured notes, up from the original target of $1.5 billion, priced at a reported yield of 6%. The deal followed a $2.3 billion loan sale earlier in October. During the pandemic, Carnival has focused on “clearing the runway” of near-term debt maturities as it begins to return its ships to service, Bloomberg says. Management forecasts larger cash burn in the fourth quarter with a return to positive free cash flow by the middle of 2022.
  • On Oct. 12, 2021, Carnival announced John Padgett as the new president of Princess Cruises, effective immediately. Padgett previously was chief experience and innovation officer for Carnival Corp. since 2014.

What's happening with Carnival and COVID-19?

Carnival paused its guest cruise operations in mid-March 2020 due to the global impact of COVID-19. The company resumed limited guest operations as part of a phased-in return to service in September 2020.

In its earnings report for Q1 FY 2021, ended Feb. 28, 2021, the company announced that initial cruises were taking place with adjusted passenger capacity and enhanced health protocols. AIDA Cruises resumed guest cruise operations in March 2021. In its Q2 FY 2021 report for the period ended May 31, 2021, Carnival that it planned to return guest services to 42 ships by fiscal year end, representing over 50% of capacity. By Aug. 31, 2021, eight of the company's nine brands had resumed guest cruise operations, with 35% of the company's capacity operating with guests on board.

Carnival Cruise Line has instituted a broad range of detailed COVID-19 protocols. These include pre-cruise questionnaires and testing for vaccinated guests, and proof of vaccination required at terminals in advance of boarding. Vaccine exemptions for select destinations in the Caribbean are currently available to a small number of children under 12, as well as teens and adults with medical conditions confirmed by their medical provider that prevent them from being vaccinated. Unvaccinated guests must present a negative PCR COVID-19 test, as well as taking an antigen test at embarkation and a test again within 24 hours of debarkation. Unvaccinated guests also must show proof of travel insurance coverage in some cases, and may only go ashore in ports of call when booked on a Carnival-sponsored bubble tour.

FAQs

When did Carnival restart its cruises?

Carnival relaunched cruises from the U.S. on July 3, 2021. On that day, the Carnival Vista set sail from Galveston, Texas.

Who is Carnival's CEO?

Carnival's CEO since 2013 is Arnold W. Donald. Donald was previously president and CEO of The Executive Leadership Council from 2010 to 2012 and of the Juvenile Diabetes Research Foundation International from 2006 to 2008. He also previously held executive leadership positions at Merisant Co. and Monsanto Co.

Has Carnival (CCL) ever split its stock?

Yes. Carnival has split its stock twice:

  • Dec. 14, 1994: a 2-for-1 split of common shares.
  • June 12, 1998: a 2-for-1 split of common shares.

Does Carnival (CCL) pay a dividend?

No, Carnival does not pay a dividend.

How many shares of Carnival (CCL) stock are there?

As of Sept. 22, 2021, Carnival’s stock had 981,048,453 shares outstanding.

Article Sources

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  10. Bloomberg. "Carnival to Sell $1.5 Billion Junk Bond as Cruises Return to Water." Accessed Nov. 7, 2021.

  11. PR Newswire. "Carnival Corporation Names John Padgett as President of Princess Cruises." Accessed Nov. 7, 2021.

  12. Carnival Corp. "CARNIVAL CORPORATION & PLC PROVIDES FIRST QUARTER 2021 BUSINESS UPDATE." Accessed Nov. 7, 2021.

  13. Carnival Corp. "Carnival Corporation & plc Provides Second Quarter 2021 Business Update." Accessed Nov. 7, 2021.

  14. Carnival Corp. "Form 10-Q for the quarterly period ended Aug. 31, 2021," Page 9. Accessed Nov. 7, 2021.

  15. Carnival Corp. "COVID-19 Guest Protocols." Accessed Nov. 7, 2021.

  16. PR Newswire. "Carnival Cruise Line Kicks Off Its First Cruise From The U.S. With Carnival Vista Sailing From Galveston This Afternoon." Accessed Nov. 7, 2021.

  17. Carnival Corp. "Investor FAQs." Accessed Nov. 7, 2021.

  18. Carnival Corp. "Dividend/Split History." Accessed Nov. 7, 2021.

  19. Carnival Corp. "Form 10-Q for the quarterly period ended Aug. 31, 2021," Page 2. Accessed Nov. 7, 2021.