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Carnival Corporation (CCL - Free Report) reported its second-quarter fiscal 2017 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.
In fact, this Miami-based cruise company’s adjusted earnings per share of 52 cents outpaced the Zacks Consensus Estimate of 47 cents by 10.6% and also surpassed the guided range of 43 cents to 47 cents. Moreover, earnings increased 6.1% year over year. It is to be noted that the company’s quarterly earnings exclude net unrealized losses on fuel derivatives.
Total revenue increased about 6.5% year over year to $3.95 billion on the back of Carnival’s efforts to drive demand.
Net revenue yields (in constant currency) increased 5.1% year over year, higher than the growth range of 2.5-3.5% projected in March. Meanwhile, gross revenue yields increased 2.7%.
Segment Revenues
Carnival earns revenues from its Passenger Tickets business, Onboard and Other as well as Tour and Other segments.
Passenger Tickets: Passenger Tickets revenues increased 6.5% year over year to $2.87 billion.
Onboard and Other: Onboard and Other revenues were $1.04 billion, up 5.9% year over year.
Tour and Other: Revenues from this segment jumped 19.4% year over year to $37 million.
Expenses
Net cruise costs (in constant dollar) per available lower berth day (ALBD), excluding fuel and impairments, increased 1.5% at the lower end of the March guidance. Also, gross cruise costs (including fuel) per ALBD in current dollars, increased 5.3%.
Carnival Corporation Price, Consensus and EPS Surprise
Fiscal third-quarter 2017 net revenue yields in constant dollars are expected to increase roughly 4% year over year. Net cruise costs, excluding fuel per ALBD, are expected to be in line with the prior year figure, on a constant dollar basis.
Based on the above factors, the company expects adjusted earnings per share in the range of $2.16 to $2.20. Meanwhile, the Zacks Consensus Estimate for earnings is pegged at $2.14 per share.
Fiscal 2017 Guidance
The company anticipates fiscal 2017 adjusted earnings per share in the range of $3.60 to $3.70 (previous projection was in the range of $3.50 to $3.70).
Based on current booking trends, the company expects fiscal 2017 net revenue yields in constant currency to be up approximately 3.5% (higher than previous expectation of 3%).
Also, the company continues to expect net cruise costs, excluding fuel per ALBD, on a constant currency basis for fiscal 2017, to be up nearly 1.5% (higher than previous expectation of 1%).
Management noted that cumulative advance bookings for the next three quarters are well ahead of the year-ago level at significantly higher prices.
The Marcus Corp. (MCS - Free Report) sporting a Zacks Rank #1. Its long-term growth estimate is pegged at 15%, while the industry’s average is 12%.
RCI Hospitality Holdings, Inc. (RICK - Free Report) is another Zacks Rank #1 company whose current quarter and current year earnings estimates have moved up 19.4% and 13.1%, respectively, in the past two months.
Royal Caribbean Cruises Ltd. (RCL - Free Report) carries a Zacks Rank #2 (Buy). Its current quarter and current year earnings estimates have moved up 15.6% and 2.4%, respectively, in the past two months.
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Carnival (CCL) Tops Q2 Earnings & Sales, Updates Guidance
Carnival Corporation (CCL - Free Report) reported its second-quarter fiscal 2017 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.
In fact, this Miami-based cruise company’s adjusted earnings per share of 52 cents outpaced the Zacks Consensus Estimate of 47 cents by 10.6% and also surpassed the guided range of 43 cents to 47 cents. Moreover, earnings increased 6.1% year over year. It is to be noted that the company’s quarterly earnings exclude net unrealized losses on fuel derivatives.
Total revenue increased about 6.5% year over year to $3.95 billion on the back of Carnival’s efforts to drive demand.
Net revenue yields (in constant currency) increased 5.1% year over year, higher than the growth range of 2.5-3.5% projected in March. Meanwhile, gross revenue yields increased 2.7%.
Segment Revenues
Carnival earns revenues from its Passenger Tickets business, Onboard and Other as well as Tour and Other segments.
Passenger Tickets: Passenger Tickets revenues increased 6.5% year over year to $2.87 billion.
Onboard and Other: Onboard and Other revenues were $1.04 billion, up 5.9% year over year.
Tour and Other: Revenues from this segment jumped 19.4% year over year to $37 million.
Expenses
Net cruise costs (in constant dollar) per available lower berth day (ALBD), excluding fuel and impairments, increased 1.5% at the lower end of the March guidance. Also, gross cruise costs (including fuel) per ALBD in current dollars, increased 5.3%.
Carnival Corporation Price, Consensus and EPS Surprise
Carnival Corporation Price, Consensus and EPS Surprise | Carnival Corporation Quote
Third-Quarter Fiscal 2017 View
Fiscal third-quarter 2017 net revenue yields in constant dollars are expected to increase roughly 4% year over year. Net cruise costs, excluding fuel per ALBD, are expected to be in line with the prior year figure, on a constant dollar basis.
Based on the above factors, the company expects adjusted earnings per share in the range of $2.16 to $2.20. Meanwhile, the Zacks Consensus Estimate for earnings is pegged at $2.14 per share.
Fiscal 2017 Guidance
The company anticipates fiscal 2017 adjusted earnings per share in the range of $3.60 to $3.70 (previous projection was in the range of $3.50 to $3.70).
Based on current booking trends, the company expects fiscal 2017 net revenue yields in constant currency to be up approximately 3.5% (higher than previous expectation of 3%).
Also, the company continues to expect net cruise costs, excluding fuel per ALBD, on a constant currency basis for fiscal 2017, to be up nearly 1.5% (higher than previous expectation of 1%).
Management noted that cumulative advance bookings for the next three quarters are well ahead of the year-ago level at significantly higher prices.
Zacks Rank & Stocks to Consider
Carnival currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Leisure and Recreation Services space include:
The Marcus Corp. (MCS - Free Report) sporting a Zacks Rank #1. Its long-term growth estimate is pegged at 15%, while the industry’s average is 12%.
RCI Hospitality Holdings, Inc. (RICK - Free Report) is another Zacks Rank #1 company whose current quarter and current year earnings estimates have moved up 19.4% and 13.1%, respectively, in the past two months.
Royal Caribbean Cruises Ltd. (RCL - Free Report) carries a Zacks Rank #2 (Buy). Its current quarter and current year earnings estimates have moved up 15.6% and 2.4%, respectively, in the past two months.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>