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Carnival (CCL) Q4 Earnings Beat Estimates, Revenues Miss

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Carnival Corporation (CCL - Free Report) has reported mixed fourth-quarter fiscal 2018 results, wherein earning surpassed estimates but revenues lagged the same. Earnings were 70 cents per share, which outpaced the Zacks Consensus Estimate of 69 cents and improved 11.1% year over year.

Revenues of $4,456 million lagged the consensus mark by $4,459 million but increased 4.6% year over year. This year-over-year top-line improvement can be attributed strength in passenger tickets, and onboard and other as well as tour and other businesses.

Net revenue yields rose 3.7% year over year on a constant-currency basis. The upswing was primarily driven by higher net ticket, and net on-board and other yields that increased 2.7% and 6.4%, respectively, in constant currency.

However, shares of Carnival decreased nearly 5% in pre-market trading session.

Carnival Corporation Price, Consensus and EPS Surprise

 

Segmental Revenues

Carnival generates revenues from Passenger Tickets business, and Onboard and Other as well as Tour and Other segments. Revenues at the Passenger Tickets business segment increased 3.4% year over year to $3,236 million. Onboard and Other revenues totaled $1,170 million, up 7% year over year. Tour and Other revenues rose 42.9% year over year to $50 million.

Expenses

Net cruise costs (in constant dollar) per available lower berth day (ALBD), excluding fuel, declined 1.8%. Gross cruise costs (including fuel) per ALBD in current dollars increased 2.4%.

Balance Sheet

Carnival exited the fiscal fourth quarter with cash and cash equivalents of approximately $982 million, up from $395 million as of Nov 30, 2017. Trade and other receivables summed $358 million, up from $312 million in the fourth quarter of fiscal 2017. Long-term debt amounted to approximately $7,897 million.

Cash from operations totaled $1,113 million in the quarter under review. Carnival spent $966 million on capital expenditure and $352 million on dividends in the same period.

First Quarter Fiscal 2019 Outlook

Carnival expects first quarter EPS to be 40-44 cents. Net revenue yields are expected to be flat with the prior year. Net cruise costs (excluding fuel) per ALBD in constant currency for the fiscal first quarter are expected to increase by roughly 2% compared with the prior year. 

Fiscal 2019 Guidance

Carnival expects 2019 EPS to be $4.50 to $4.80 compared with adjusted earnings per share of $4.26 recorded in fiscal 2018.

The company expects full-year net cruise costs (excluding fuel) per ALBD to be up approximately 0.5% compared to the prior year. Moreover, management expects net cruise revenues to be up 5.5%, with capacity growth of 4.6% and higher net revenue yields by 1%.

Zacks Rank & Stocks to Consider

Carnival currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the leisure space are Hudson (HUD - Free Report) , Manchester United (MANU - Free Report) and Marcus Corporation (MCS - Free Report) . While Hudson and Manchester United currently sport a Zacks Rank #1 (Strong Buy), Marcus Corporation carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hudson, Manchester United and Marcus Corporation’s earnings for the current year are expected to grow 104.6%, 14.3% and 22.1%, respectively.

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