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Carnival Climbs on Positive Q3 Results, Outlook

Carnival says it was cash flow positive in the third quarter and expects that trend to continue into the end of the year.

Shares of cruise line Carnival Corp  (CCL) - Get Carnival Corporation Report were rising Friday afternoon after the company said that its voyages for the third quarter were cash flow positive and that it expects the trend will continue. 

The company said it ended the third quarter with $7.8 billion of liquidity, which it believes will be sufficient to return to full cruise operations. As of August 31, eight of Carnival's nine brands have resumed operations as part of its gradual return to service following the height of the Covid-19 pandemic. 

"We are very glad to be back doing what we do best, delivering memorable vacation experiences for our guests," said CEO Arnold Donald. "Even at this early stage with intentionally constrained occupancy levels, our voyages are already cash flow positive."

Revenue per passenger cruise in the third quarter was up compared to "a strong 2019" despite current constraints. Occupancy was still just 54% overall in the quarter, but rose from 39% in June to 59% in August. 

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Shares of Carnival were up 2.5% to $25.30 in afternoon trading Friday.

The company reported a monthly average cash burn rate of $510 million, which was better than previous guidance and in line with its $500 million monthly average cash burn rate for the first half of the year. 

"It is difficult to demonstrate just how successful our restart effort has been because many cruises, while generating positive cash flow, were limited to scenic cruises without ports of call, and generally priced well below the attractive destination rich cruises we normally offer," Donald said.