Back to top

Image: Bigstock

Carnival (CCL) Q3 Loss Narrower Than Excepted, Revenues Lag

Read MoreHide Full Article

Carnival Corporation (CCL - Free Report) reported third-quarter fiscal 2020 results, with earnings surpassed the Zacks Consensus Estimate and revenues missing the same. Following the results, the company’s shares declined 2.4% yesterday.

Further, a glance at the company’s price performance shows that it has underperformed the industry so far this year. The stock has lost 69.3% compared with the industry’s decline of 40.1%.

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.

Carnival Corporation Price, Consensus and EPS Surprise Carnival Corporation Price, Consensus and EPS Surprise

Carnival Corporation price-consensus-eps-surprise-chart | Carnival Corporation Quote

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.

Zacks Rank & Stock to Consider

Carnival, which shares space with Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Royal Caribbean Group (RCL - Free Report) , has a Zacks Rank #4 (Sell). A better-ranked stock in the leisure space includes Camping World Holdings, Inc. (CWH - Free Report) , which carries a Zacks Rank # 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Camping World Holdings has an impressive long-term earnings growth rate of 34.7%.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.3% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>

Published in