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Factors Setting the Tone for Carnival's (CCL) Q1 Earnings

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Carnival Corporation (CCL - Free Report) is likely to witness a year-over-year earnings decline while reporting first-quarter fiscal 2020 results. In the last-reported quarter, the company delivered a positive earnings surprise of 21.6%. Further, it came up with average trailing four-quarter beat of 11.3%.
 
How Are Estimates Trending?
 
The Zacks Consensus Estimate for earnings in the fiscal first quarter is pegged at 23 cents. This indicates a 53.1% decrease from 49 cents registered in the year-ago quarter. Revenues are expected at $4,665 million, suggesting a decline of 0.2% from the year-earlier reported figure.
 
Carnival Corporation Price and EPS Surprise

Factors at Play

Soft Passenger Tickets revenues amid the coronavirus outbreak might have negatively impacted the company’s performance in the first quarter. The Zacks Consensus Estimate for the segment’s revenues is pegged at $3,163 million, implying a 1.1% dip from the year-ago reported figure. Moreover, due to the coronavirus outbreak, increased cancellations are likely to  affect results. 

In the event that the company has to suspend all its operations in Asia through April end, the action might take a toll of 55-65 cents per share on its fiscal 2020 financial performance including guest compensation. However, the company’s Onboard and Other segment are likely to have favored the company’s performance. The Zacks Consensus Estimate for the segmental revenues stands at $1,474 million, hinting at 1.9% growth from the prior-year reported figure. 
 
However, higher net cruise costs might have been a persistent concern. During the fiscal first quarter of fiscal 2020, net cruise costs (excluding fuel) per ALBD are expected to have risen 2.9% from the prior-year quarter in constant currency. Moreover, currency headwind along with macroeconomic issues in key operating regions is likely to have a bearing on results.
 
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 chances of beating estimates.
 
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 
Carnival has an Earnings ESP of -60.30% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
 
Stocks With Favorable Combination
 
Here are some stocks worth considering as our model shows that these have the right combination of elements to beat on earnings:
 
CarMax (KMX - Free Report) currently has an Earnings ESP of +0.13% and a Zacks Rank of 3.
 
General Mills, Inc. (GIS - Free Report) currently has an Earnings ESP of +1.28% and a Zacks Rank #3.
 
Sony Corporation (SNE - Free Report) presently has an Earnings ESP of +16.05% and is Zacks #3 Ranked.
 
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This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
 

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Sony Corporation (SNE) - free report >>

Carnival Corporation (CCL) - free report >>

General Mills, Inc. (GIS) - free report >>

CarMax, Inc. (KMX) - free report >>