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Why Is Carnival (CCL) Up 2% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Carnival Corporation (CCL - Free Report) . Shares have added about 2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Carnival reported its third-quarter fiscal 2017 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
In fact, this Miami-based cruise company’s adjusted earnings per share of $2.29 outpaced the Zacks Consensus Estimate of $2.20 by 4.1% and surpassed the guided range of $2.16 to $2.20. The bottom line also increased 19.3% year over year. It is to be noted that the company’s quarterly earnings exclude net unrealized losses on fuel derivatives.
Total revenue increased about 8% year over year to $5.5 billion on the back of Carnival’s efforts to drive demand. The top line also surpassed the Zacks Consensus Estimate of $5.4 billion.
Net revenue yields (in constant currency) increased 5.1% year over year, higher than the roughly 4% growth projected in June. Meanwhile, gross revenue yields increased 5.5%.
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 8.8% year over year to $4.14 billion.
Onboard and Other: Onboard and Other revenues were $1.22 billion, up 6.7% year over year.
Tour and Other: Revenues from this segment increased 4.1% year over year to $154 million.
Expenses
Net cruise costs (in constant dollar) per available lower berth day (ALBD), excluding fuel and impairments, inched up 0.2%, almost in line with the June guidance of approximately flat. Also, gross cruise costs (including fuel) per ALBD in current dollars, increased 12.4%. Fourth-Quarter Fiscal 2017 View
Fiscal fourth-quarter 2017 net revenue yields in constant dollars are expected to increase in the band of 1.5-2.5% year over year. Net cruise costs, excluding fuel per ALBD, are anticipated to rise in the range of 6-7% from the prior year figure, on a constant dollar basis.
Based on the above factors, the company expects adjusted earnings per share in the range of 44 to 50 cents. Disruptions related to the series of storms are likely to reduce EPS by 10-12 cents in the fiscal fourth quarter.
Fiscal 2017 Guidance
The company anticipates fiscal 2017 adjusted earnings per share in the range of $3.64 to $3.70 (previous projection was in the range of $3.60 to $3.70).
Based on current booking trends, the company expects fiscal 2017 net revenue yields in constant currency to be up approximately 4% (higher than previous expectation of 3.5%).
Also, the company continues to expect net cruise costs, excluding fuel per ALBD, on a constant currency basis for fiscal 2017, to be up nearly 2.5% (higher than previous expectation of 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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to four lower. In the past month, the consensus estimate has shifted by 20.2% due to these changes.
VGM Scores
At this time, Carnival's stock has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Why Is Carnival (CCL) Up 2% Since the Last Earnings Report?
It has been about a month since the last earnings report for Carnival Corporation (CCL - Free Report) . Shares have added about 2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Carnival Tops Q3 Earnings & Revenues, Ups FY17 Guidance
Carnival reported its third-quarter fiscal 2017 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
In fact, this Miami-based cruise company’s adjusted earnings per share of $2.29 outpaced the Zacks Consensus Estimate of $2.20 by 4.1% and surpassed the guided range of $2.16 to $2.20. The bottom line also increased 19.3% year over year. It is to be noted that the company’s quarterly earnings exclude net unrealized losses on fuel derivatives.
Total revenue increased about 8% year over year to $5.5 billion on the back of Carnival’s efforts to drive demand. The top line also surpassed the Zacks Consensus Estimate of $5.4 billion.
Net revenue yields (in constant currency) increased 5.1% year over year, higher than the roughly 4% growth projected in June. Meanwhile, gross revenue yields increased 5.5%.
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 8.8% year over year to $4.14 billion.
Onboard and Other: Onboard and Other revenues were $1.22 billion, up 6.7% year over year.
Tour and Other: Revenues from this segment increased 4.1% year over year to $154 million.
Expenses
Net cruise costs (in constant dollar) per available lower berth day (ALBD), excluding fuel and impairments, inched up 0.2%, almost in line with the June guidance of approximately flat. Also, gross cruise costs (including fuel) per ALBD in current dollars, increased 12.4%.
Fourth-Quarter Fiscal 2017 View
Fiscal fourth-quarter 2017 net revenue yields in constant dollars are expected to increase in the band of 1.5-2.5% year over year. Net cruise costs, excluding fuel per ALBD, are anticipated to rise in the range of 6-7% from the prior year figure, on a constant dollar basis.
Based on the above factors, the company expects adjusted earnings per share in the range of 44 to 50 cents. Disruptions related to the series of storms are likely to reduce EPS by 10-12 cents in the fiscal fourth quarter.
Fiscal 2017 Guidance
The company anticipates fiscal 2017 adjusted earnings per share in the range of $3.64 to $3.70 (previous projection was in the range of $3.60 to $3.70).
Based on current booking trends, the company expects fiscal 2017 net revenue yields in constant currency to be up approximately 4% (higher than previous expectation of 3.5%).
Also, the company continues to expect net cruise costs, excluding fuel per ALBD, on a constant currency basis for fiscal 2017, to be up nearly 2.5% (higher than previous expectation of 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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to four lower. In the past month, the consensus estimate has shifted by 20.2% due to these changes.
VGM Scores
At this time, Carnival's stock has a nice Growth Score of B, though it is lagging a lot on the momentum front with an F. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.