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Carnival (CCL) Beats on Q3 Earnings, Lifts FY16 Guidance

CCL MTN CLUB PLNT

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Carnival Corp. (CCL - Free Report) reported strong third-quarter fiscal 2016 results, wherein both earnings and revenues beat the Zacks Consensus Estimate.
 
The Miami-based cruise company’s adjusted earnings per share of $1.92 outpaced the Zacks Consensus Estimate of $1.89 by 1.6% and also surpassed the guided range of $1.83 to $1.87. Further, earnings surged 9.7% year over year on the back of higher revenues. Quarterly earnings exclude net unrealized losses on fuel derivatives.
 
Total revenue increased 4.4% year over year to $5.10 billion on the back of Carnival’s efforts to drive demand. Revenues also beat the Zacks Consensus Estimate of $5.04 billion by 1.1%.
 
Net revenue yields (in constant currency) increased 2.7% year over year, toward the higher end of the 2–3% rise projected in June. Gross revenue yields, however, increased only 0.6%.

CARNIVAL CORP Price, Consensus and EPS Surprise

 

CARNIVAL CORP Price, Consensus and EPS Surprise | CARNIVAL CORP Quote

Segment Revenues
 
Carnival earns revenues from its Passenger Tickets business, Onboard and Other as well as Tour and Other segments.
 
Passenger Tickets: Passenger Tickets revenues increased 4.7% year over year to $3.80 billion.
 
Onboard and Other: Onboard and Other revenues were $1.15 billion, up 4% year over year.
 
Tour and Other: Revenues declined 1.3% year over year to $148 million.
 
Expenses
 
Net cruise costs (in constant dollar) per available lower berth day (ALBD) (fuel and impairments excluded) increased 5.5%, better than the expected increase of 6% to 7% in costs due to favorable timing. Gross cruise costs, including fuel per ALBD in current dollars, decreased 0.2%, supported by favorable changes in fuel prices.
 
Fourth-Quarter Fiscal 2016 View
 
Fiscal fourth-quarter net revenue yields in constant dollars are expected to increase roughly 3% year over year. Net cruise costs, excluding fuel per ALBD, are expected to grow 1% year over year on a constant dollar basis.
 
Based on the above factors, the company expects adjusted earnings per share in the range of 55 cents to 59 cents. Meanwhile, the Zacks Consensus Estimate for earnings stands at 59 cents per share.
 
Fiscal 2016 Guidance
 
The company raised its full-year 2016 adjusted earnings per share projection. It now expects earnings in the range of $3.33 to $3.37 compared with $3.25–$3.35 guided previously.
 
Based on current booking trends, the company continues to expect full-year 2016 net revenue yields in constant currency to be up approximately 3.5%.
 
Also, the company still expects net cruise costs, excluding fuel per ALBD, on a constant currency basis, for full-year 2016 to be up nearly 1.5%.
 
Management noted that cumulative advance bookings for the first half of next year are well ahead of the year-ago level at significantly higher prices. 
 
Zacks Rank & Stocks to Consider
 
Carnival presently has a Zacks Rank #3 (Hold). Better-ranked stocks in the sector include Town Sports International Holdings Inc. (CLUB - Free Report) , Vail Resorts Inc. (MTN - Free Report) and Planet Fitness, Inc. (PLNT - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
 
Town Sports International Holdings’ has posted positive earnings surprise in two of the last four quarters, with an average beat of 10.01%. Further, for full-year 2016, EPS is expected to grow a solid 56.4%. 
 
Vail Resorts’ earnings have surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 7.61%. Further, for full-year 2016, EPS is expected to grow a solid 40.5%.
 
The Zacks Consensus Estimate for Planet Fitness’ 2016 earnings climbed 1.5% over the last 60 days. The company’s earnings have surpassed the Zacks Consensus Estimate in all of the last four quarters, with an average beat of 13.3%. 
 
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