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Why Is Carnival (CCL) Down 7.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Carnival (CCL - Free Report) . Shares have lost about 7.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Carnival due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Carnival reported impressive first-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily backed by sustained demand strength and increased booking volumes at significantly higher prices.
Earnings & Revenues
In the quarter under review, the company reported an adjusted loss per share of 14 cents, narrower than the Zacks Consensus Estimate of a loss of 18 cents. In the year-ago quarter, the company reported an adjusted loss of 55 cents.
Revenues in the quarter totaled $5.4 billion, beating the consensus mark by 0.02%. In the prior-year quarter, CCL reported revenues of $4.4 billion.
In the first quarter of fiscal 2024, passenger ticket revenues amounted to $3.6 billion, up from $2.9 billion in the prior-year quarter. Our estimate for passenger ticket revenues was $3.2 billion.
Onboard and other revenues increased to $1.8 billion, up from $1.6 billion reported in the year-ago quarter. Our estimate for Onboard and other revenues was $2.1 billion.
Q1 Financials
During the fiscal first quarter, the company reported a GAAP net loss of $214 million compared with a loss of $693 million reported in the prior-year quarter. Adjusted net loss in the quarter amounted to $180 million compared with $690 million reported in the year-ago quarter.
Balance Sheet
As of Feb 29, 2024, cash and cash equivalents were $2.2 billion compared with $2.4 billion as of Nov 30, 2023. Carnival ended the quarter with liquidity of $5.2 billion. Total debt (current and long-term) as of Feb 29, 2024, was $30.7 billion compared with $30.6 billion as of Nov 30, 2023.
Adjusted EBITDA, as of Feb 29, 2024, came in at $871 million compared with $382 million reported in the prior-year quarter.
Bookings Update
In the first fiscal quarter, the company announced strong bookings for its NAA and Europe segments, with booking levels notably higher compared to the previous year. Despite limited inventory, booking volumes reached unprecedented levels, courtesy of solid demand for future sailings (beyond 2025). The surge in demand resulted in increased prices and a longer booking window. The company reported a solid booked position for the remainder of the year, with pricing and occupancy significantly higher than 2023 levels.
Total customer deposits as of Feb 29 were $7 billion compared with $6.4 billion reported in the previous quarter. The amount was higher than $5.7 billion reported on Feb 28, 2023.
2024 Outlook
For the second quarter of fiscal 2024, the company expects adjusted EBITDA to be approximately $1.05 billion. The company expects fiscal second-quarter adjusted net income to be nearly ($35) million. The company expects a fiscal second-quarter adjusted loss per share to be 3 cents.
For fiscal 2024, the company anticipates adjusted EBITDA to be approximately $5.63 billion. Adjusted net income during the year is anticipated to be nearly $1.3 billion. In the fiscal 2024, the company expects adjusted EPS to be 98 cents compared with the previous expectation of 93 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Carnival has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Carnival has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Carnival (CCL) Down 7.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Carnival (CCL - Free Report) . Shares have lost about 7.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Carnival due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Carnival Q1 Earnings Surpass Estimates, Increase Y/Y
Carnival reported impressive first-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily backed by sustained demand strength and increased booking volumes at significantly higher prices.
Earnings & Revenues
In the quarter under review, the company reported an adjusted loss per share of 14 cents, narrower than the Zacks Consensus Estimate of a loss of 18 cents. In the year-ago quarter, the company reported an adjusted loss of 55 cents.
Revenues in the quarter totaled $5.4 billion, beating the consensus mark by 0.02%. In the prior-year quarter, CCL reported revenues of $4.4 billion.
In the first quarter of fiscal 2024, passenger ticket revenues amounted to $3.6 billion, up from $2.9 billion in the prior-year quarter. Our estimate for passenger ticket revenues was $3.2 billion.
Onboard and other revenues increased to $1.8 billion, up from $1.6 billion reported in the year-ago quarter. Our estimate for Onboard and other revenues was $2.1 billion.
Q1 Financials
During the fiscal first quarter, the company reported a GAAP net loss of $214 million compared with a loss of $693 million reported in the prior-year quarter. Adjusted net loss in the quarter amounted to $180 million compared with $690 million reported in the year-ago quarter.
Balance Sheet
As of Feb 29, 2024, cash and cash equivalents were $2.2 billion compared with $2.4 billion as of Nov 30, 2023. Carnival ended the quarter with liquidity of $5.2 billion. Total debt (current and long-term) as of Feb 29, 2024, was $30.7 billion compared with $30.6 billion as of Nov 30, 2023.
Adjusted EBITDA, as of Feb 29, 2024, came in at $871 million compared with $382 million reported in the prior-year quarter.
Bookings Update
In the first fiscal quarter, the company announced strong bookings for its NAA and Europe segments, with booking levels notably higher compared to the previous year. Despite limited inventory, booking volumes reached unprecedented levels, courtesy of solid demand for future sailings (beyond 2025). The surge in demand resulted in increased prices and a longer booking window. The company reported a solid booked position for the remainder of the year, with pricing and occupancy significantly higher than 2023 levels.
Total customer deposits as of Feb 29 were $7 billion compared with $6.4 billion reported in the previous quarter. The amount was higher than $5.7 billion reported on Feb 28, 2023.
2024 Outlook
For the second quarter of fiscal 2024, the company expects adjusted EBITDA to be approximately $1.05 billion. The company expects fiscal second-quarter adjusted net income to be nearly ($35) million. The company expects a fiscal second-quarter adjusted loss per share to be 3 cents.
For fiscal 2024, the company anticipates adjusted EBITDA to be approximately $5.63 billion. Adjusted net income during the year is anticipated to be nearly $1.3 billion. In the fiscal 2024, the company expects adjusted EPS to be 98 cents compared with the previous expectation of 93 cents.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision flatlined during the past month.
VGM Scores
At this time, Carnival has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Carnival has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.