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
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.
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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
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 >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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