U.S. Markets closed

Factors Setting the Tone for Carnival (CCL) Q4 Earnings

Carnival Corporation CCL is scheduled to report fourth-quarter fiscal 2018 results on Dec 20, before market open. In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 2.2%. In fact, the company’s earnings have surpassed the consensus mark for 19 straight quarters.

What to Expect?

The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at 70 cents, calling for growth of 11.1% from the year-ago quarter. Meanwhile, the Zacks Consensus Estimate for revenues stands at $4.46 billion, reflecting growth of nearly 4.7% from the prior-year quarter.

Let’s delve deeper to find out how the company’s top and bottom lines have performed this earnings season.

Factors at Play

Strength in passenger tickets, onboard and other as well as tour and other businesses are likely to aid the top line in the fiscal fourth quarter.

Based on the solid bookings growth in the prior year, the top line is poised to increase year over year on higher sale of passenger tickets. The company expects the current strength in bookings, particularly in Caribbean, Alaska, Europe, Asia and Australia, to continue. Meanwhile, the Zacks Consensus Estimate for fourth-quarter revenues at the Passenger Tickets segment is pegged at $3,262 million, reflecting a year-over-year increase of 4.2%. Meanwhile, in the third quarter, passenger tickets revenues improved 5.2% year over year.

Moreover, the Zacks Consensus Estimate for the Onboard and Other segment’s revenues is pinned at $1,165 million, reflecting a year-over-year increase of 6.6%. In fact, the segment has witnessed a gain of 7.6% in third-quarter fiscal 2018. The trend is likely to continue on higher onboard spending by guests.

Driven by robust booking trends, the Zacks Consensus Estimate for Tour and Other revenues is pegged at $37 million, reflecting a year-over-year rise of 5.7%.

Per the consensus estimate, net revenue yield is likely to improve 2.4% year over year in the fourth quarter, following the 2.9% increase in the last reported quarter. The company continues to drive revenue yield growth by creating demand in excess of measured capacity growth through its ongoing guest experience, marketing and public relation efforts.

The company expects fourth-quarter 2018 net revenue yields, in constant dollars, to improve in the band of 1.5-2.5% year over year. The company also expects sequential yield improvement, particularly in Caribbean, in the quarter.

Carnival Corporation Price and EPS Surprise

 

Carnival Corporation Price and EPS Surprise | Carnival Corporation Quote
 

What Does the Zacks Model Unveil?

Our proven model suggests that Carnival is not likely to beat earnings estimates in the fourth quarter as it has an Earnings ESP of -0.72% and a Zacks Rank #4 (Sell).
 
A stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for an earnings beat. Meanwhile, stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies in the Consumer Discretionary space, which per our model have the right combination of elements to post an earnings beat in their respective quarterly results.

Rogers Communications Inc. RCI has an Earnings ESP of +0.94% and a Zacks Rank #2. The company is anticipated to report quarterly results on Jan 24.

DISH Network Corporation DISH has a Zacks Rank #2 and an Earnings ESP of +11.27%. The company is expected to report quarterly results on Feb 20.

Crocs, Inc. CROX has an Earnings ESP of +10.20% and a Zacks Rank #1. The company is anticipated to report quarterly results on Feb 27.

More Stock News: This Is Bigger than the iPhone!                   

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.  

Click here for the 6 trades >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
DISH Network Corporation (DISH) : Free Stock Analysis Report
 
Rogers Communication, Inc. (RCI) : Free Stock Analysis Report
 
Carnival Corporation (CCL) : Free Stock Analysis Report
 
Crocs, Inc. (CROX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.