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Carnival (CCL) Q2 Earnings and Revenues Miss Estimates

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Shares of Carnival Corporation & plc (CCL - Free Report) have declined more than 7% since it reported second-quarter fiscal 2021 results on Jun 24. The company reported second-quarter 2021 SEC filing, wherein both earnings and revenues missed the Zacks Consensus Estimate. The top line lagged the consensus mark for the fifth straight quarter, while the bottom line missed the same for the third consecutive quarter. Notably, cruise cancellations due to the coronavirus pandemic affected the company’s performance.

The company reported loss per share of $1.80, wider than the Zacks Consensus Estimate of a loss of $1.68. In the year-ago quarter, the company had reported loss per share of $3.30. Revenues amounted to $50 million, which fell short of the consensus mark of $129 million. The top line also declined sharply from the prior-year quarter’s figure of $740 million.

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 and Cash Burn

Carnival ended the quarter with cash and cash equivalents of $9.3 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 first half of 2021 totaled $500 million, compared with the previously anticipated figure of $550 million. The improvement was primarily driven by the timing of proceeds from ship sales and working capital changes.

Bookings Update

During the second quarter, booking volumes for all future cruises increased 45% compared with the prior quarter. The company stated that cumulative advanced bookings for full year 2022 are ahead of a very robust 2019 as of May 31, 2021. These bookings were achieved by negligeable advertising and marketing.

Meanwhile, total customer deposits as of May 31, 2021 amounted to $2.5 billion compared with $2.2 billion as of Feb 28, 2021. During the quarter, customer deposits on new bookings exceeded the impact of refunds.

2021 Outlook

The company refrained from providing earnings guidance for fiscal 2021 due to the pandemic. However, it expects phased resumption of cruise operations to have a material impact on all aspects of its business, including the company's liquidity, financial position and results of operations. Going forward, the company anticipates to report a net loss on both U.S. GAAP and adjusted basis for the third 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 51.4%.

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