What happened
A rising tide lifts all boats, and that's what's literally occurring today as Carnival (CCL 3.57%) (CUK 3.71%) reported a second-quarter business update that's got Royal Caribbean (RCL 3.55%) and Norwegian Cruise Lines (NCLH 5.39%) also riding the wave higher.
Yet while Carnival said revenue, booking volumes, and occupancy are all on the rise, it's the shares of its rivals that are jumping higher. Where Carnival stock is up 9.9% at 11:16 a.m. ET on Friday, shares of Royal Caribbean are running 12.7% higher and Norwegian is up 11.6%.
Image source: Getty Images.
So what
Cruise line stocks have lost at least two-thirds of their value or more since just before the pandemic descended upon the world, and while they trade sharply higher from the depths they sunk to during those first days of panic, Carnival, Royal Caribbean, and Norwegian have failed to fully find the wind at their back.
Their business was kept depressed far longer than virtually any other industry; while their businesses are slowly recovering as global economies reopen, they are still very damaged. Carnival's business update suggests it might finally be ready to head out to the open sea again.
Now what
Carnival reported revenue surged nearly 50% sequentially in the second quarter to $2.4 billion, though it was below analyst expectations of almost $2.8 billion. Revenue per passenger cruise day, however, was down only slightly to pre-pandemic levels.
It's now operating at 91% of capacity, and booking volumes in the second quarter for future cruises were nearly double those achieved in the first quarter. Occupancy rates were also up to 69% for the period versus 54% in the previous one.
