Carnival Corp (CCL)

[Tha Part Time Er]

Carnival is one of the highest-profile corporate victims of the pandemic. The company suffered several massive outbreaks of the disease on its Princess line of cruises and recorded a $731 goodwill impairment charge in the first quarter after writing down the value of its vessels. These challenges have sent the stock down over 70% year to date. But Carnival has enough liquidity to sail through the pandemic.

The company raised a huge amount of capital to help it weather the crisis. The company undertook a public offering of 62.5 million shares priced at $8 and a debt raise of $4 billion in 11.5% senior secured notes, along with $1.75 billion in 5.75% senior convertible notes, both due in 2023. According to CEO Arnold Donald, Carnival has enough cash to make it through 2020 even it generates zero revenue for the rest of the year, a worst-case scenario.

On May 4, Carnival announced plans to resume North American service on Aug. 1, but this will depend on whether or not the CDC lifts its no-sail order by then. But even if Carnival doesn't sail for the rest of the year, 2021 bookings are strong according CEO Arnold Donald. This suggests there is significant pent-up cruise demand among consumers, and the cruise operator may quickly return to profitability when restrictions are lifted.