Carnival Corporation (CCL) operates as a cruise and vacation company. The company is one of the largest cruise operators in the world and operates through three segments, North America cruise brands, EAA cruise brands and Cruise Support. Carnival has adopted a strategy to grow beyond its familiar itineraries and capitalize on Asian opportunities.
Strong marketing initiatives have been helping the company to keep its booking strong over the past few years at most of its itineraries, thereby resulting in improvement in revenue yields. Its consistent efforts to reduce fuel consumption have aided the company to generate profits.
Investors should also note the recent earnings estimate revisions for CCL, as the consensus estimate has been almost moving upwards. Moreover, CCL has a decent history in earnings season. Carnival Corp. has delivered positive earnings as well as revenues surprises for four quarters in a row, making for an average earnings surprise of just over 138% and average revenue surprise of just around 0.3%.
Currently, CCL has a Zacks Rank #3 (Hold), but this has chances of changing following Carnival Corp.’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: CCL beat on earnings. Our consensus earnings estimate called for EPS of 9 cents per share, and the company reported EPS of 20 cents per share instead. Investors should note that these figures take out stock option expenses.
Revenues: CCL reported revenues of $3.53 billion. This missed our consensus estimate of 3.57 billion.
Key Stats to Note: On a constant dollar basis, net revenue yields (net revenue per available lower berth day) increased 2%, which was better than the company's December guidance of flat to up 1%. Gross revenue yields decreased 3.1% in current dollars, mainly due to changes in currency exchange rates.
Net cruise costs, excluding fuel per ALBD, increased 2.4% in constant dollars primarily due to higher dry-dock costs and advertising expenses. Fuel consumption per ALBD, however, decreased 3.7% year over year.
The company lowered the higher end of its earnings guidance for 2015 and expects it to be in the range of $2.30 to $2.50, versus the prior outlook of earnings ranging between $2.30 to $2.60 per share.
How the Market Reacted So Far
Following the earnings release, Carnival’s shares were up nearly 5% in the pre-trading session. This is the same as what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have considered the results in their favor. However, the full-session’s price movement may indicate a different picture.
Check back later for our full write up on this CCL earnings report later!
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