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Factors Setting the Tone for Carnival's (CCL) Q3 Earnings

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Carnival Corporation (CCL - Free Report) is scheduled to report third-quarter fiscal 2021 business update on Sep 24. In the last reported quarter, the company reported a negative earnings surprise of 7.1%.

How are Estimates Placed?

The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at a loss of $1.44 per share, indicating an improvement of 34.3% from a loss of $2.19 reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $713.9 million. The metric suggests an increase of 2,202.8% from the year-ago quarter’s figure.

Carnival Corporation Price and EPS Surprise


Carnival Corporation Price and EPS Surprise

Carnival Corporation price-eps-surprise | Carnival Corporation Quote


Let's take a look at how things have shaped up in the quarter.

Factors to Note

Carnival’s fiscal third-quarter performance is likely to have benefited from the phased resumption of operations. Given the advancement in vaccine treatments along with efforts to mitigate the spread of the virus, the company anticipates positive cash flow from the 27 ships (with guest cruise operations) in the to-be-reported quarter. Focus on cost reductions and streamlining of shoreside operations are likely to have boosted the company’s fiscal third-quarter bottom line.

Despite capacity constraints, the company continues to focus on rebalancing its portfolio through ship exits, transfer and modifications to newbuilds. Initiatives toward capitalizing on pent-up demand coupled with structurally lower costs (resulting from the replacement of less-efficient vessels with more-efficient vessels) are likely to have benefited the company in the to-be-reported quarter.

However, decline in occupancy levels due to social-distancing protocols coupled with restricted deployment options is likely to have negatively impacted the company’s performance in the fiscal third quarter. This along with a rise in capital expenditures in terms of restarting operations as well as progress payments on future newbuilds is likely to have dented the company’s fiscal third-quarter bottom line.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Carnival this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Carnival has an Earnings ESP +9.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Roku, Inc. (ROKU - Free Report) has a Zacks Rank #1 and an Earnings ESP of +152%.

Crocs, Inc. (CROX - Free Report) sports a Zacks Rank #2 and has an Earnings ESP of +1.20%.

Camping World Holdings Inc. (CWH - Free Report) has a Zacks Rank #3 and an Earnings ESP of +10.55%.

In-Depth Zacks Research for the Tickers Above

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Carnival Corporation (CCL) - Free Report >>

Crocs, Inc. (CROX) - Free Report >>

Camping World (CWH) - Free Report >>

Roku, Inc. (ROKU) - Free Report >>