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Factors Setting the Tone for Carnival's (CCL) Q4 Earnings

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Zacks Equity Research
·3 min read
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Carnival Corporation CCL is likely to register a year-over-year decline in the bottom line when it reports fourth-quarter fiscal 2020 results. In the last reported quarter, the company delivered an earnings surprise of 1.4%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the fiscal fourth-quarter bottom line is pegged at a loss of $1.86 per share. In the prior-year quarter, the company reported earnings per share of 62 cents. The consensus mark for revenues is $150.5 million, suggesting a decline of 96.9% from the year-ago reported figure.

Factors to Note

Carnival’s fiscal fourth-quarter results are likely to reflect the adverse impacts of the coronavirus pandemic. Soft passenger ticket revenues on account of the company’s limited cruise operationsmight have weighed on the overall top line. Moreover, cancellations of cruises due to the ongoing crisis and change in booking patterns are likely to get reflected in the to-be-reported quarter’s results.

Carnival Corporation Price and EPS Surprise

Carnival Corporation Price and EPS Surprise
Carnival Corporation Price and EPS Surprise

Carnival Corporation price-eps-surprise | Carnival Corporation Quote

Passenger Tickets revenues are expected to decrease year over year, due to the pandemic. The Zacks Consensus Estimate for the segment’s fourth-quarter revenues is pegged at $77 million, suggesting a decline of 97.6% from the year-ago reported figure.

Meanwhile, Onboard and Other revenues are anticipated to decline. Notably, the same wintnessed a sharp fall in third-quarter fiscal 2020. The Zacks Consensus Estimate for the segment’s revenues is pegged at $40.3 million, indicating a decline of 98.9% from the prior-year quarter.

Moreover, quarterly earnings are likely to reflect the impact of cash burn. Amid the coronavirus-induced shutdowns, the company’s average cash burn rate for fourth-quarter 2020 is estimated to be nearly $530 million. In third-quarter 2020, the company’s monthly average cash burn rate was $770 million, which was in line with the company’s expectation.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict 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 odds of an earnings beat. But that's not the case here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Carnival has a Zacks Rank #4 (Sell) and an Earnings ESP of +6.08%.

Stocks Poised to Beat Earnings Estimates

Here are some stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these have the right combination of elements to post an earnings beat in the quarter to be reported:

Activision Blizzard, Inc. ATVI has a Zacks Rank #3 and an Earnings ESP of +2.42%.

Cedar Fair, L.P. FUN has a Zacks Rank #3 and an Earnings ESP of +11.16%.

PlayAGS, Inc. AGS presently has a Zacks #3 and an Earnings ESP of +4.84%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Activision Blizzard, Inc (ATVI) : Free Stock Analysis Report
 
Carnival Corporation (CCL) : Free Stock Analysis Report
 
Cedar Fair, L.P. (FUN) : Free Stock Analysis Report
 
PlayAGS, Inc. (AGS) : Free Stock Analysis Report
 
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