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Carnival Shares Jump After Quarterly Update Signals Improved Bookings

CEO Arnold Donald said the cruise operator is ready to "capitalize on pent-up demand and achieve significant cost improvement" heading into the second quarter.

Carnival Corp  (CCL) - Get Carnival Corporation Report shares jumped higher Wednesday after the cruise operator said it would likely post a first quarter loss of around $2 billion, but noted improved bookings and cash balances.

Carnival said in a business update release that its adjusted loss for the three months ending in February would come in just under $2 billion, but noted it closed out the year with around $11.5 billion in cash and equivalents, a $2 billion improvement from the start of the year.

Carnival, which operates the AIDA, Costa and Princess cruises, also said its cash burn rate was flat to last quarter's improved monthly rate of around $500 million, and that advanced 2022 bookings were running ahead of 2019 levels recorded through the month of March.

First quarter bookings, Carnival said, were up 90% compared to the three months ending in November, while customer deposits held steady at $2.2 billion.

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"We are focused on resuming operations as quickly as practical, while at the same time demonstrating prudent stewardship of capital and doing so in a way that serves the best interests of public health," said CEO Arnold Donald. "Our highest responsibility and therefore our top priority is always compliance, environmental protection and the health, safety and well-being of everyone."  

"Throughout the pause we have been positioning Carnival Corporation to return to serving guests an operationally stronger company than we were before," he added. "With an exciting roster of six new, more efficient ships by December and with lower capacity from the exit of 19 less efficient ships, we expect to capitalize on pent-up demand and achieve significant cost improvement from the greater efficiency of our fleet, along with ongoing streamlining of shoreside operations."  

Carnival shares were marked 1.9% higher in mid-day trading Wednesday to indicate change hands at $29.12 each, extending its six-month gain to around 82%

Earlier this week, the Centers for Disease Control and Prevention issued new travel guidelines for the cruise ship industry, but held firm on its views that vessels can't begin carrying a full load of passengers until November 1.