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Carnival (CCL) Posts Wider-than-Expected Q1 Loss, Bookings Up

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Carnival Corporation & plc (CCL - Free Report) reported first-quarter fiscal 2021 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. The top line lagged the consensus estimate for the fourth straight quarter. Notably, cruise cancellations due to the coronavirus pandemic continue to affect the company results. Despite reporting lower-than-expected first-quarter results, its shares gained 1.4% courtesy of surge in bookings.  

The company reported loss per share of $1.79, wider-than the Zacks Consensus Estimate of a loss of $1.66. In the year-ago quarter, the company had reported earnings per share of 22 cents. Revenues amounted to $26 million, which fell short of the consensus mark of $108 million. The top line also declined sharply from the prior-year quarter’s figure of $4.8 billion. The company reported adjusted net loss of $2 billion in the first quarter.

Carnival, president and CEO Arnold Donald said “We are focused on resuming operations as quickly as practical, while at the same time demonstrating prudent stewardship of capital and doing so in a way that serves the best interests of public health. Our highest responsibility and therefore our top priority is always compliance, environmental protection and the health, safety and well-being of everyone.”

Liquidity and Cash Burn

The company ended the quarter with cash and cash equivalents of $11.5 billion. The company announced that it has enough liquidity to return to full operation. It further added that it will be pursuing refinancing opportunities to decrease interest expense and extend maturities.

Moreover, average monthly cash burn in the quarter was $500 million, marginally better than the company’s expectation. It anticipates average monthly cash burn in first half of 2021 to be nearly $550 million, which is better-than previously anticipated.

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

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

Bookings Update

The company stated that cumulative advanced bookings for full year 2022 are ahead of a very robust 2019 as of Mar 21, 2021. These bookings were achieved by negligeable advertising and marketing.

The company’s CEO further said “Booking volumes are accelerating. During the first quarter of 2021 they were approximately 90% higher than volumes during the fourth quarter of 2020 reflecting both the significant pent up demand and long-term potential for cruising.”

The company refrained from providing earnings guidance for fiscal 2021 due to the pandemic. Pause in operations will continue to hurt the company’s liquidity, results and results. The company anticipates to report a net loss on both U.S. GAAP and adjusted basis for the second quarter and full year ending Nov 30, 2021.

Zacks Rank & a Key Pick

Carnival — which shares space with Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) and Royal Caribbean Group (RCL - Free Report) in the Zacks Leisure and Recreation Services industry — carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked stock in the same space is Camping World Holdings, Inc. (CWH - Free Report) , which sports a Zacks Rank #1.

Camping World Holdings’ 2021 earnings are expected to surge 20.5%.

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