01—Abstract
Summary
Summary of the 10-Q filed March 25, 2025. Cited figures are marked; the original filing is the authoritative source.
Carnival Corporation & plc reported a net loss of $78 milliona ($0.06 per diluted share) for the three months ended February 28, 2025, an improvement from a net loss of $214 million ($0.17 per diluted share) in the prior year period.
This narrowing of losses was driven by a significant increase in revenue, up 7.6% to $5.8 billionb, fueled by higher passenger ticket prices and increased onboard spending. Despite the revenue growth, the company faced substantial debt extinguishment and modification costs amounting to $252 million, which weighed on profitability. Operationally, the company saw a capacity increase of 2.5%, primarily in its North America segment, contributing to higher occupancy and passenger volumes.
While fuel costs saw a slight decrease, overall operating expenses rose modestly due to increased capacity and related costs. Carnival also proactively managed its debt, issuing new notes and redeeming older, higher-interest debt, which, while incurring significant extinguishment costs in the short term, aims to improve long-term financial flexibility and reduce interest expense. The company ended the quarter with substantial liquidity, including cash and available credit facilities.
02—Key points
Key Highlights
- Revenue increased by 7.6% to $5.8 billion, driven by higher passenger ticket prices and increased onboard spending.
- Net loss narrowed to $78 million from $214 million in the prior year quarter.
- Operating income significantly improved to $543 million from $276 million, primarily due to revenue growth and lower interest expenses.
- Total debt was reduced, with a focus on refinancing higher-interest debt.
- The company experienced a 2.5% increase in capacity (Available Lower Berth Days), led by the North America segment.
- Significant debt extinguishment and modification costs of $252 million were incurred due to debt refinancing activities.
- Liquidity remains strong, with $833 million in cash and cash equivalents and substantial availability under revolving credit facilities.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2025, Carnival Corp lost $0.01.
- Revenue$5.81B100.0%
- Cost of revenue−$3.77B64.8%
- Gross profit$2.04B35.2%
- Operating costs−$1.50B25.8%
- Operating income$543.0M9.3%
- Interest, other & tax−$621.0M10.7%
- Net income−$78.0M1.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed March 25, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $5.81B$5.41B | +7.5% |
| Cost of Revenue | $3.77B$3.71B | +1.6% |
| Gross Profit | $2.04B$1.70B | +20.2% |
| SG&A Expenses | $848.00M$813.00M | +4.3% |
| Operating Expenses | $5.27B$5.13B | +2.7% |
| Operating Income | $543.00M$276.00M | +96.7% |
| Net Income | -$78.00M-$214.00M | +63.6% |
| EPS (Basic) | $-0.06$-0.17 | +64.7% |
| EPS (Diluted) | $-0.06$-0.17 | +64.7% |
| Shares Outstanding (Basic) | 1.31B1.26B | +3.6% |
| Shares Outstanding (Diluted) | 1.31B1.26B | +3.6% |
05—Questions
Frequently Asked Questions
What is Carnival's overall financial performance for this quarter?
Carnival Corporation & plc reported a net loss of $78 million for the quarter ended February 28, 2025, compared to a net loss of $214 million in the same period last year. While still reporting a loss, this represents a significant improvement, driven by a 7.6% increase in total revenues to $5.8 billion, primarily due to higher ticket prices and increased guest spending onboard.
How did Carnival manage its debt during the quarter?
Carnival actively managed its debt by issuing $1.0 billion in 5.8% senior unsecured notes due 2030 and $2.0 billion in 6.1% senior unsecured notes due 2033, using the proceeds to redeem older, higher-interest debt. This strategy led to significant debt extinguishment and modification costs of $252 million for the quarter but is intended to reduce future interest expenses and improve financial flexibility.
What is the outlook for capacity and demand?
The company reported a 2.5% increase in capacity (Available Lower Berth Days) year-over-year, driven by new ship introductions in the North America segment. Occupancy remained strong at 103%. Management noted continued strength in demand, contributing to higher ticket prices and onboard spending.
What are the major expenses impacting profitability?
While revenues grew, operating expenses also increased by 1.7% to $3.8 billion, largely due to the increased capacity and related costs. A significant factor impacting the net loss was the $252 million in debt extinguishment and modification costs. Interest expense, net of capitalized interest, decreased by 20% to $377 million, benefiting from lower total debt and average interest rates.
06—Continue