Why Is Carnival (CCL) Up 28.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Carnival (CCL). Shares have added about 28.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Carnival due for a pullback? Before we dive into how investors and analysts have reacted as 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 Q4 Earnings Top, Revenues Miss Estimates
Carnival reported fourth-quarter fiscal 2022 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. Nevertheless, the top and the bottom line improved on a year-over-year basis.
Carnival Corporation's chief executive officer Josh Weinstein, stated, “Booking volumes strengthened following the relaxation in protocols, cancellation trends are improving globally, and we have seen a measurable lengthening in the booking curve, across all brands. The momentum has continued into December, which bodes well for 2023 overall as more markets open for cruise travel, protocols continue to relax, our closer to home itineraries play out, our stepped-up advertising efforts pay dividends and our brands continue to hone all aspects of their revenue generating activities.”
Earnings & Revenues
In the quarter under review, the company reported a loss per share of 85 cents, narrower than the Zacks Consensus Estimate of a loss of 89 cents. In the year-ago quarter, the company had reported a loss per share of $1.72.
Revenues in the quarter totaled $3,839 million, which fell short of the consensus mark of $3,959 million. The top line improved sharply from the prior-year quarter’s figure of $1,287 million. Passenger ticket and onboard and other revenues were $2,269 million and $1,570 million, respectively.
During the fiscal fourth quarter, the company reported a GAAP net loss of $1,598 million compared with a loss of $2,620 million reported in the prior-year quarter. Adjusted net loss in the quarter amounted to $1,068 million compared with $1,955 million reported in the year-ago quarter.
In fourth-quarter fiscal 2022, occupancy came in at 85% compared with 58% reported in the prior quarter. For cruise segments, revenue per PCD for the fourth quarter of fiscal 2022 increased 0.5% compared with a strong 2019.
Cash and cash equivalents as of Nov 30, 2022, were $4,029 million compared with $7,071 million reported in the previous quarter. Carnival ended the quarter with liquidity of $8,635 million. Total debt (current and long-term) as of Nov 30, 2022, was $34.5 billion compared with $34.1 billion as of Aug 31, 2022.
Adjusted EBITDA, as of Nov 30, 2022, came in at ($96) million compared with ($1,060) million reported in the prior-year quarter.
During the fiscal fourth quarter, the company reported accelerated booking volumes on account of relaxed protocols, opening of more markets for cruise travel and advertising efforts. The company stated that its North America and Australia segment's 2023 booking volumes are above 2019 levels, while Europe and Asia segment 2023 booking volumes were lower than the same. The company stated that its 2023 cumulative advanced booked position is above the historical ranges and at increased prices compared with 2019 levels.
Meanwhile, total customer deposits as of Nov 30 were $5.1 billion compared with $4.8 billion reported in the previous quarter. The amount was higher than $4.9 billion reported in 2019.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -17.46% due to these changes.
Currently, Carnival has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Carnival has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Carnival is part of the Zacks Leisure and Recreation Services industry. Over the past month, Vail Resorts (MTN), a stock from the same industry, has gained 1.5%. The company reported its results for the quarter ended October 2022 more than a month ago.
Vail Resorts reported revenues of $279.45 million in the last reported quarter, representing a year-over-year change of +59.2%. EPS of -$3.40 for the same period compares with -$3.44 a year ago.
For the current quarter, Vail Resorts is expected to post earnings of $6.12 per share, indicating a change of +11.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Vail Resorts. Also, the stock has a VGM Score of B.
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