Cruise lines surge after Carnival reports 2021 demand "within historical ranges"

• Cruise lines soared on Friday after Carnival Corp. reported second quarter earnings that revealed a few positive trends developing within the industry, after its business was decimated by COVID-19.
• The company said cumulative advanced booking for 2021 is "within historical ranges" with prices that are down slightly low to mid-single digits on a comparable basis.
• Carnival saw revenue in the quarter fall 84% year-over-year, but revenue still managed to best analyst and its own estimates.
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Consumers seem to have little fear of reboarding cruise lines and setting sail after the coronavirus pandemic, based on a booking update from Carnival Corp.

The company finalized its second quarter earnings and provided a business update on Friday.

Here are the key numbers:

Revenue: $740 million, versus its previous June estimate of $700 million
Adjusted EPS: -$3.30, versus analyst estimates of -$1.76

From a booking perspective, Carnival is seeing a bounce-back in consumer demand. While the company has announced a slew of incentives and lowered prices by low- to mid-single digits, new bookings in 2021 "remain within historical ranges."

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In the first three weeks of June, Carnival said nearly 60% of 2021 bookings were new bookings, while the rest were the result of consumers booking trips through credits given to them because of a canceled trip.

From a liquidity standpoint, Carnival is in much better shape than it was just a few months ago. The company said it managed to reduce operating costs by more than $7 billion on an annualized basis, and it will have reduced capital expenditures by more than $5 billion over the next 18 months.

Carnival also secured $10 billion of additional liquidity, which will "sustain another full year with additional flexibility remaining," the company said.

The booking and liquidity update from Carnival is sending cruise line stocks higher in Friday's trading session. Carnival Corp. surged as much as 11.5% to $16.27, Royal Caribbean Cruises jumped as much as 8% to $50.98, and Norwegian Cruise Line Holdings traded up as much as 7% to $16.22.