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Carnival (CCL) Down 11.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Carnival (CCL - Free Report) . Shares have lost about 11.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Carnival due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Carnival Q3 Loss Narrower Than Excepted, Revenues Lag
Carnival reported third-quarter fiscal 2020 results, with earnings surpassed the Zacks Consensus Estimate and revenues missing the same.
In the quarter under review, the company reported loss per share of $2.19, narrower than the Zacks Consensus Estimate of a loss of $2.22. In the prior-year quarter, the company had reported earnings per share of $2.63.
Revenues came in at $31 million, which missed the consensus mark of $100 million. The top line also declined sharply from the prior-year quarter’s figure of $6.5 billion. Results in the quarter were impacted by the coronavirus-induced shutdowns.
The company’s cruise operations have been halted due to the pandemic. It is unable to predict the entire fleet’s return to normal operations. Due to this, the company is unable to provide guidance.
Bookings Update
The company stated that cumulative advanced bookings for second half of 2021 capacity currently available for sale are at the higher end of the historical range. However, pricing on these bookings are down by mid-single digits compared with the second half of 2019, on a comparable basis. This reflects the effect of future cruise credits ("FCC") from previously-cancelled cruises being applied. Bookings for 2021 and 2020 are going on.
Liquidity & Cash Burn
Carnival exited the fiscal third quarter with liquidity of more than $8 billion. Amid the coronavirus-induced shutdowns, the company’s average cash burn rate for the fourth half of 2020 is estimated to be nearly $530 million. In third-quarter 2020, the company’s monthly average cash burn rate was $770 million, which was in line with the company’s expectation.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Carnival has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. It's no surprise Carnival has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Carnival (CCL) Down 11.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Carnival (CCL - Free Report) . Shares have lost about 11.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Carnival due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Carnival Q3 Loss Narrower Than Excepted, Revenues Lag
Carnival reported third-quarter fiscal 2020 results, with earnings surpassed the Zacks Consensus Estimate and revenues missing the same.
In the quarter under review, the company reported loss per share of $2.19, narrower than the Zacks Consensus Estimate of a loss of $2.22. In the prior-year quarter, the company had reported earnings per share of $2.63.
Revenues came in at $31 million, which missed the consensus mark of $100 million. The top line also declined sharply from the prior-year quarter’s figure of $6.5 billion. Results in the quarter were impacted by the coronavirus-induced shutdowns.
The company’s cruise operations have been halted due to the pandemic. It is unable to predict the entire fleet’s return to normal operations. Due to this, the company is unable to provide guidance.
Bookings Update
The company stated that cumulative advanced bookings for second half of 2021 capacity currently available for sale are at the higher end of the historical range. However, pricing on these bookings are down by mid-single digits compared with the second half of 2019, on a comparable basis. This reflects the effect of future cruise credits ("FCC") from previously-cancelled cruises being applied. Bookings for 2021 and 2020 are going on.
Liquidity & Cash Burn
Carnival exited the fiscal third quarter with liquidity of more than $8 billion. Amid the coronavirus-induced shutdowns, the company’s average cash burn rate for the fourth half of 2020 is estimated to be nearly $530 million. In third-quarter 2020, the company’s monthly average cash burn rate was $770 million, which was in line with the company’s expectation.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a downward trend in fresh estimates.
VGM Scores
Currently, Carnival has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. It's no surprise Carnival has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.