Carnival Corp. & plc (NYSE:CCL)

Goodwill

The goodwill value shows a significant decrease from 2925 million US dollars in 2018 to 579 million US dollars by 2021, remaining stable through 2023. This sharp decline suggests a substantial impairment or divestiture impacting the company's intangible assets over this period.

Trademarks

Trademarks remain relatively stable throughout the years, fluctuating slightly between 1151 million and 1180 million US dollars. This indicates consistent valuation and no major impairment or additions in this intangible asset category.

Other Intangibles

The category designated as "Other" shows a slight gradual decrease from 7 million in 2018 to 5 million by 2023, reflecting a minor but steady reduction.

Other Intangibles (inclusive category)

"Other intangibles" maintain relative stability with values hovering around 1156 to 1186 million US dollars, suggesting consistent valuation over the years with minor fluctuations.

Goodwill and Other Intangibles (combined)

The combined figure of goodwill and other intangibles sharply declines from 4101 million in 2018 to 1748 million in 2023. This overall reduction corresponds with the marked decrease in goodwill, partially offset by steady intangible assets, indicating an overall contraction in intangible asset valuation, primarily driven by goodwill write-downs.

Assets

The total assets, both reported and adjusted, exhibit an overall increasing trend from 2018 through 2020, reaching a peak in 2020 with reported assets at approximately US$53.6 billion and adjusted assets close to US$52.8 billion. Subsequently, total assets have shown a gradual decline year over year, dropping to about US$49.1 billion reported and US$48.5 billion adjusted by the end of 2023. This downward movement in assets post-2020 indicates a possible contraction or asset divestment phase following earlier expansion.

Shareholders' Equity

Shareholders’ equity has demonstrated a marked decrease over the period under review. Reported equity fell from approximately US$24.4 billion in 2018 to just under US$6.9 billion by 2023. Adjusted equity followed a similar trajectory, declining from US$21.5 billion to about US$6.3 billion. This persistent decline suggests erosion of equity value, possibly due to accumulated losses or other financial pressures adversely impacting the company’s net asset position.

Net Income (Loss)

Net income figures reveal a significant shift from profitability in 2018 and 2019 to substantial losses starting in 2020. Reported net income showed a gain of over US$3.1 billion in 2018 and just under US$3 billion in 2019 before plunging to losses exceeding US$10 billion in 2020. Although losses slightly improved in subsequent years, the company remained in a negative net income position through 2023, with losses narrowing dramatically to only US$74 million reported in the latest year. Adjusted net income follows a similar pattern, indicating persistent operational and possibly extraordinary challenges during the period analyzed.

Overall Insights

The financial data reflects a company experiencing significant financial distress starting in 2020, highlighted by a steep decline in net income and shareholders’ equity despite initially growing total assets. The continued reduction in asset base from 2021 to 2023, along with eroding equity and ongoing net losses, suggests challenges in maintaining profitability and financial stability. The narrowing of net losses toward the end of 2023 may indicate early signs of recovery or improved financial management, though equity levels remain substantially lower than earlier periods.

The financial data reveals a significant deterioration in profitability and efficiency metrics over the analyzed periods, especially from 2020 onwards.

Net Profit Margin

The reported net profit margin showed a positive yet declining trend from 16.69% in 2018 to 14.36% in 2019, followed by a steep plunge into large negative territory beginning in 2020, reaching -182.95%. This negative trend continued with margins of -497.96% in 2021, -50.07% in 2022, and slightly improving to -0.34% in 2023. The adjusted net profit margin follows a similar pattern but with somewhat mitigated negative values, indicating the impact of goodwill adjustments partly improves margin visibility but does not alter the overall negative trend.

Total Asset Turnover

Reported total asset turnover remained relatively stable around 0.45 from 2018 to 2019 before collapsing dramatically to 0.10 in 2020 and further to 0.04 in 2021. The ratio showed partial recovery in 2022 and 2023, increasing to 0.24 and 0.44 respectively. Adjusted turnover ratios exhibit almost the same trend but maintain slightly higher levels, suggesting that goodwill adjustments marginally enhance perceived asset efficiency.

Financial Leverage

Financial leverage ratios increased progressively over the period. The reported leverage rose moderately from 1.73 in 2018 to 1.78 in 2019, followed by a sharp increase to 2.61 in 2020 and accentuated growth to 4.39 in 2021. This upward trend intensified with leverage reaching 7.32 and 7.14 in 2022 and 2023 respectively. The adjusted leverage ratios are consistently higher than the reported figures, peaking at 7.88 in 2022 before a slight decline to 7.7 in 2023, highlighting increased dependency on debt or other liabilities when considering goodwill adjustments.

Return on Equity (ROE)

ROE suffered a dramatic setback from a positive 12.9% in 2018 and 11.79% in 2019 to substantial negative values through 2020 to 2022, with reported ROE hitting -49.8%, -78.24%, and -86.24% respectively. In 2023, ROE improved close to break-even at -1.08%. The adjusted ROE mirrors this decline but indicates even more severe negative returns during the downturn, reaching as low as -93.94% in 2022 and ending at -1.17% in 2023, underscoring severe equity erosion impacts from the company's operating environment and goodwill considerations.

Return on Assets (ROA)

ROA decreased from 7.43% in 2018 and 6.64% in 2019 to negative figures from 2020 onwards, with a nadir of -19.1% reported in 2020 and further deepening to -17.81% in 2021. Thereafter, losses narrowed to -11.78% and -0.15% in 2022 and 2023 respectively. Adjusted ROA values follow a consistent path but are slightly higher in positive years and slightly less negative in downturn years compared to reported ROA, suggesting goodwill adjustment's partial cushioning effect on asset profitability metrics.

Overall, the financial profile reflects substantial operational and financial strain beginning in 2020, coinciding with an increase in financial leverage and sharp declines in profitability and efficiency ratios. The adjusted figures, incorporating goodwill, slightly alleviate some metrics but confirm the overall negative impact on financial health. Recent years signal initial signs of recovery towards improved asset turnover and profitability, though returns remain near zero or negative, indicating continued challenges in restoring pre-crisis performance levels.

Analysis of the annual financial performance reveals significant fluctuations in profitability over the reported periods.

Net Income (Loss) Trends

The reported net income was positive and relatively stable in 2018 and 2019, amounting to $3,152 million and $2,990 million respectively. However, starting in 2020, there was a drastic decline, resulting in substantial losses: -$10,236 million in 2020, followed by -$9,501 million in 2021, and continued negative results in 2022 and 2023 with losses of -$6,093 million and -$74 million respectively. The adjusted net income, which accounts for goodwill, showed a similar pattern, except the loss in 2020 was slightly lower at -$8,140 million, indicating that goodwill adjustments partially mitigated net losses for that year. Nevertheless, the adjusted losses remained considerably large through 2023.

Net Profit Margin Analysis

The reported net profit margin correspondingly demonstrates an initial modest positive margin of 16.69% in 2018, decreasing slightly to 14.36% in 2019. From 2020 onward, the margin plummeted deeply into negative territory, reflecting the underlying large losses. The reported margin shows extreme negative values such as -182.95% in 2020 and -497.96% in 2021, indicating that losses greatly exceeded revenues or that extraordinary items substantially impacted profitability metrics. The margin partially recovered afterward but remained negative at -50.07% in 2022 and close to break-even at -0.34% in 2023. The adjusted net profit margin trends closely track the reported margins, with less severe negativity in 2020 (-145.49%) after adjustment, but still following the same overall trajectory.

Overall Observations

The data implies that the company experienced a severe profitability shock beginning in 2020, possibly related to unprecedented external challenges or operational disruptions, which led to persistent losses through the subsequent years. While goodwill adjustments offered some reduction in reported losses during the initial shock year, they did not materially alter the downward trend. The gradual improvement in 2023, though still negative, suggests a move toward stabilizing financial performance. However, full recovery to pre-2020 profitability levels does not appear achieved by the end of the latest period.

Total Assets

The reported total assets exhibit an overall increasing trend from 42,401 million US dollars in 2018 to a peak of 53,593 million in 2020. Subsequently, the total assets slightly declined to 53,344 million in 2021, followed by a consistent decrease reaching 49,120 million in 2023. The adjusted total assets follow a similar pattern, rising from 39,476 million in 2018 to 52,786 million in 2020, then gradually decreasing to 48,541 million by 2023. This indicates that adjustments related to goodwill do not significantly alter the general asset trend but reflect a consistently lower asset base compared to the reported figures.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios are closely aligned throughout the period. The turnover ratio was relatively stable around 0.45-0.49 in 2018 and 2019 before sharply declining to 0.10 and 0.11 respectively in 2020. This decline continued into 2021 with a further drop to 0.04, reflecting significant operational challenges or reduced asset utilization during this period. Recovery is observed in 2022 and 2023, with the turnover ratio improving to 0.24 and then returning to approximately 0.44, approaching pre-2020 levels. The similarity between reported and adjusted turnover suggests goodwill adjustments have minimal impact on asset efficiency measurements.

General Insights

The data reflect a period of growth in asset base until 2020, followed by contraction likely influenced by external factors impacting asset management or market conditions. The sharp dip in total asset turnover ratios between 2020 and 2021 suggests a notable decline in revenue generation efficiency relative to asset size, possibly due to operational disruptions. Subsequent improvements in turnover ratios indicate a partial recovery in asset productivity. The alignment of reported and adjusted figures underscores consistency in reporting and the relatively modest effect of goodwill adjustments on asset valuation and operational metrics.

The financial data reveals several notable trends over the six-year period. Total assets, both reported and goodwill adjusted, show an overall increase from 2018 to 2020, peaking around 2020 and 2021, followed by a gradual decline through 2023. This suggests that the company expanded its asset base significantly before experiencing a contraction in recent years.

Shareholders’ equity exhibits a contrasting pattern. Both reported and adjusted equity decline steadily from 2018 through 2023, with the most pronounced drops occurring after 2019. This consistent reduction indicates that the company’s net worth has been decreasing, potentially reflecting operational challenges, losses, or increased liabilities impacting equity.

Financial leverage ratios, derived from the relationship between total assets and shareholders’ equity, increase markedly throughout the period. The leverage ratio more than doubles from 2018 to 2020 and continues to rise sharply into 2022, peaking before slightly declining by 2023. The adjusted leverage ratios follow a similar trajectory but are consistently higher than reported leverage, underscoring the impact of goodwill adjustments on the perceived financial risk.

Total Assets

Steady growth from 2018 (approx. $42.4 billion) through 2020 (approx. $53.6 billion), then plateauing and experiencing a slight decline to about $49.1 billion by 2023.

Adjusted total assets show similar trends, reflecting consistent valuation methods with and without goodwill adjustment.

Shareholders’ Equity

Declines steadily from about $24.4 billion (reported) and $21.5 billion (adjusted) in 2018 to approximately $6.9 billion (reported) and $6.3 billion (adjusted) by 2023.

The persistent decrease suggests erosion of equity base, possibly driven by sustained losses, impairments, or increased liabilities.

Financial Leverage

Reported leverage rises from 1.73 in 2018 to a peak of 7.32 in 2022, before a minor decrease to 7.14 in 2023.

Goodwill adjusted leverage starts higher and follows a similar ascending pattern, peaking at 7.88 in 2022 and slightly decreasing to 7.7 in 2023.

The increased leverage indicates growing reliance on debt or liabilities relative to equity, which may elevate financial risk.

Overall, the data indicates an initial phase of asset growth followed by a contraction in equity, resulting in significantly higher leverage levels. These shifts suggest increasing financial risk elements, with a constricted equity base and heightened dependence on external funding or liabilities in the latter years analyzed.

Net Income (Loss) Trends

The reported net income experienced a significant decline starting from 2019, with positive values of 3,152 million USD in 2018 and 2,990 million USD in 2019, followed by sharp losses in subsequent years. The largest loss occurred in 2020 at -10,236 million USD, with continued losses in 2021 and 2022, although the magnitude decreased to -9,501 million USD and -6,093 million USD respectively. By 2023, the net loss greatly reduced to -74 million USD, suggesting a partial recovery from severe losses.

The adjusted net income figures generally reflect the same trend as the reported net income but show smaller losses in 2020 (-8,140 million USD) and slightly different values in other years, indicating certain adjustments likely related to goodwill or other non-operational factors. The adjustment appears to soften the losses notably in 2020 but does not eliminate the overall downward trend.

Shareholders’ Equity Trends

Reported shareholders’ equity showed a decreasing trend over the period. It was relatively stable from 2018 (24,443 million USD) to 2019 (25,365 million USD) but diminished sharply starting in 2020 (20,555 million USD). By 2021, equity fell to 12,144 million USD, continued declining to 7,065 million USD in 2022, and marginally decreased further to 6,882 million USD in 2023.

The adjusted shareholders' equity follows a very similar trajectory but consistently reflects lower equity values than the reported figures, which suggests that adjustments reduce the reported equity base, possibly by excluding goodwill or other intangible assets. This confirms ongoing erosion of equity over the years, potentially linked to operational losses and write-downs.

Return on Equity (ROE) Analysis

Reported ROE moved from strong positive returns in 2018 (12.9%) and 2019 (11.79%) to deeply negative figures afterward, beginning with -49.8% in 2020 and peaking at -86.24% in 2022. A significant improvement is seen in 2023, with ROE improving to -1.08%, indicating an approach towards breakeven but still negative returns on equity.

Adjusted ROE figures follow a consistent pattern with reported ROE but display more pronounced negative percentages from 2020 onwards. The adjusted ROE dropped to -41.22% in 2020, declined further to -93.94% in 2022, and slightly improved to -1.17% in 2023. The adjustments exacerbate the negative returns during the loss years, likely excluding goodwill or other intangible assets from equity, resulting in a leaner equity base.

Overall Insights

The data reveals a pronounced deterioration in financial performance starting in 2020, with severe net losses and a significant reduction in equity. The sharp decline correlates with a strong negative impact on shareholder returns. Although there is evidence of some recovery in 2023, profitability remains challenged, and equity levels have not yet stabilized at previous highs. Adjustments related to goodwill have a material effect, particularly in depicting a more conservative measure of equity and returns post-2019. The trends suggest that while there may be efforts to improve financial health, substantial challenges remain in restoring profitability and equity strength.

Net Income (Loss) Trends

The reported net income showed strong positive values in 2018 and 2019, with $3,152 million and $2,990 million, respectively. However, a significant downturn occurred in 2020, with a reported net loss of $10,236 million, which continued through 2021 and 2022 with losses of $9,501 million and $6,093 million. By 2023, the loss drastically narrowed to $74 million. The adjusted net income mirrored this trend, although the losses in 2020 are less severe due to adjustments, declining from a positive $2,990 million in 2019 to a negative $8,140 million in 2020.

Total Assets Trends

Reported total assets increased from $42,401 million in 2018 to reach a peak of $53,593 million in 2020 before gradually declining to $49,120 million by 2023. Adjusted total assets followed a similar pattern, rising from $39,476 million in 2018 to $52,786 million in 2020, then decreasing to $48,541 million in 2023. This suggests a peak in asset base coinciding with the onset of large losses.

Return on Assets (ROA) Trends

The reported ROA declined steadily from a healthy 7.43% in 2018 and 6.64% in 2019 to deeply negative levels during 2020 and 2021, with -19.1% and -17.81%, respectively. This negative trend improved slightly but remained negative in 2022 at -11.78%, and nearly reached breakeven at -0.15% in 2023. The adjusted ROA showed a somewhat less severe but similar pattern, peaking at 7.98% in 2018 before falling to -15.42% in 2020 and gradually recovering towards -0.15% in 2023.

Overall Observations

The data indicate substantial financial distress beginning in 2020, with significant net losses and negative returns on assets, likely reflecting extraordinary or non-recurring events impacting profitability. The asset base peaked in 2020, possibly due to acquisitions or revaluations, followed by a steady decline. The alignment of adjusted and reported figures suggests the adjustments mainly moderate the extent of losses in certain periods but do not alter the overall negative trend. By 2023, losses and negative returns have diminished markedly, signaling potential stabilization or recovery efforts beginning to take effect.