8-KEarnings & ResultsRegulation FD

CARNIVAL CORP 8-K Report, Financial Results (Mar 19, 2020)

Filed March 19, 2020For Securities:CCL

Summary

Carnival Corporation & Carnival plc reported a significant net loss of $781 million for the first quarter of 2020, a stark contrast to the net income reported in the prior year. This loss includes substantial goodwill and ship impairment charges totaling $932 million. Excluding these charges, adjusted net income was $150 million, down from $338 million in the first quarter of 2019. The COVID-19 pandemic began to impact results in the quarter, contributing approximately $0.23 per share to the net loss through cancelled voyages and other disruptions. Looking ahead, the company faces considerable uncertainty due to the ongoing effects of COVID-19. While booking volumes for the first half of 2021 were initially trending slightly higher than the prior year, the latter part of the booking period (ending March 15, 2020) showed a meaningful decline, particularly for the remainder of 2020, with bookings at lower prices. Carnival has temporarily paused its global fleet operations and anticipates material negative impacts on its financial results and liquidity. The company is actively taking steps to improve liquidity, including reducing capital expenditures and expenses, and is pursuing additional financing. An earnings forecast for fiscal year 2020 is currently not provided, but a net loss is expected.

Key Highlights

  • 1Reported a U.S. GAAP net loss of $781 million for Q1 2020, compared to net income in Q1 2019.
  • 2Q1 2020 results include $932 million in goodwill and ship impairment charges.
  • 3Adjusted net income for Q1 2020 was $150 million, a significant decrease from $338 million in Q1 2019.
  • 4COVID-19 impact on Q1 2020 net loss was approximately $0.23 per share.
  • 5Total revenues for Q1 2020 were $4.8 billion, slightly higher than $4.7 billion in the prior year.
  • 6Company has temporarily paused global fleet operations due to COVID-19.
  • 7Carnival drew down its entire $3.0 billion revolving credit facility to bolster liquidity.
  • 8Booking volumes for the remainder of 2020 are meaningfully lower than the prior year at considerably lower prices.

Frequently Asked Questions

The primary reason for the net loss is a combination of substantial goodwill and ship impairment charges totaling $932 million, alongside the initial impacts of the COVID-19 pandemic, which caused voyage cancellations and disruptions, contributing approximately $0.23 per share to the loss.

COVID-19 has led to a temporary pause in global fleet operations and is expected to materially negatively impact financial results and liquidity. It has also caused a significant slowdown in booking volumes for the remainder of 2020 and beyond, with bookings occurring at considerably lower prices.

Carnival has temporarily paused its global fleet operations, is implementing capital expenditure and expense reductions, and is actively pursuing additional financing. The company also fully drew down its $3.0 billion revolving credit facility to increase its cash position and financial flexibility.

Due to the significant uncertainty surrounding the COVID-19 situation and its impact, Carnival is currently unable to provide an earnings forecast for the fiscal year ending November 30, 2020. However, it expects to report a net loss on both a U.S. GAAP and adjusted basis for the full year.