What happened
Shares of cruise ship operator Carnival (CCL 3.37%) ended the trading day Thursday down more than 2% after the company said it expected to post adjusted losses of $2 billion for the second quarter.
So what
Revealing just how ugly a company's financials can look if its business is forced to close for nearly a year and a half, Carnival still struck a hopeful tone by noting it has plenty of cash available.
Image source: Carnival.
The cruise line said it ended the quarter with $9.3 billion in cash and short-term investments, which ought to be sufficient to let it ride out the storm as it prepares for returning to full operations by next spring. Already 42 ships from eight of its nine brands had resumed sailing or would do so by the end of November, better than 50% of its total capacity.
Now what
That seems a bit premature to crow over since November is still five months away, but Carnival said it is burning only $500 million a month over the first six months of 2021, which was less than it previously forecast, primarily because of timing issues on ship sales and working capital changes.
While not giving up on the current year, Carnival seems focused more on next year for a fresh start, pointing out consumer demand for voyages in 2022 is running ahead of what it was in 2019 before the pandemic struck, and which was a very strong year for the travel stock.
