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Carnival Corporation Hits 52-Week High

Zacks Equity Research

Shares of the cruise company, Carnival Corporation (CCL) reached a 52-week high of $40.47 on Tuesday, Dec 31, 2013 after posting impressive fourth-quarter fiscal 2013 results on Dec 19, 2013. The company’s share price has been showing an uptrend since the fourth quarter results.

Adjusted earnings of 4 cents per share beat the Zacks Consensus Estimate of a breakeven result driven by higher revenues. Despite declining year over year, fourth quarter earnings were ahead of management’s guidance of a loss of 3 cents to earnings of 3 cents.  

The top line increased 2.2% year over year and beat the Zacks Consensus Estimate by approximately 2.3%. The upside was driven by increased cruise sales resulting from higher ticket prices and increased onboard spending, which offset lower net revenue yields.

Though the company expects to incur a loss in fiscal first quarter 2014, it expects to return to profit by the end of the year. It also expects revenue yield to improve in the second half of 2014 driven by a better booking environment and higher ticket pricing.

Driven by the strong results, estimates for fiscal 2014 largely moved upwards over the last 30 days. The Zacks Consensus Estimate for fiscal 2014 increased 5.7% to $1.68 over the same period.

Going forward, the company’s brand-building efforts and other promotional activities are expected to continue to prove beneficial for the company. Reduction in fuel consumption is another bright spot in Carnival’s report card. The company presently has a short-term Zacks Rank #2 (Buy).

Some other stocks worth considering in the sector include SeaWorld Entertainment, Inc. (SEAS), HomeAway, Inc. (AWAY) and Interval Leisure Group, Inc. (IILG). While SeaWorld Entertainment holds a Zacks Rank #1 (Strong Buy), HomeAway Inc. and Interval Leisure Group carry a Zacks Rank #2 (Buy).


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