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Carnival (CCL) Beats Q2 Earnings Estimates, Raises '24 View

Carnival Corporation & plc CCL reported impressive second-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom line increased on a year-over-year basis. The upside was primarily backed by sustained demand strength and increased booking volumes.

Following the results, the stock moved up 5% during trading hours on Jun 25. Positive investor sentiments were witnessed as the company reported better-than-expected guidance for 2024. The management expects net yields to exceed 10% and drive double-digit returns on invested capital.

Earnings & Revenues

In the quarter under review, the company reported an adjusted earnings per share (EPS) of 11 cents, beating the Zacks Consensus Estimate of a loss of 1 cent. In the year-ago quarter, the company reported an adjusted loss of 31 cents.

Carnival Corporation Price, Consensus and EPS Surprise

 

Carnival Corporation Price, Consensus and EPS Surprise
Carnival Corporation Price, Consensus and EPS Surprise

Carnival Corporation price-consensus-eps-surprise-chart | Carnival Corporation Quote

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Revenues in the quarter totaled $5.8 billion, beating the consensus mark of $5.7 billion. In the prior-year quarter, CCL reported revenues of $4.9 billion.

In second-quarter fiscal 2024, passenger ticket revenues amounted to $3.8 billion, up from $3.1 billion reported in the prior-year quarter. Our estimate for passenger ticket revenues was $3.6 billion.

Onboard and other revenues increased to $2 billion, up from $1.8 billion reported in the year-ago quarter. Our estimate for Onboard and other revenues was $1.97 billion.

Q2 Financials

During the fiscal second quarter, the company reported a GAAP net income came in at $92 million against a loss of $407 million reported in the prior-year quarter. Adjusted net income in the quarter amounted to $134 million against a loss of $395 million reported in the year-ago quarter.

Balance Sheet

As of May 31, 2024, cash and cash equivalents were $1.6 billion compared with $2.4 billion as of Nov 30, 2023. Carnival ended the quarter with liquidity of $4.6 billion. Total debt (current and long-term) as of May 31, 2024, was $29.3 billion compared with $30.6 billion as of Nov 30, 2023.

Adjusted EBITDA, as of May 31, 2024, came in at $1.2 billion compared with $681 million reported in the prior-year quarter.

Bookings Update

The company reported strong booking momentum for 2025, with record volumes surpassing 2024 levels in both price and occupancy. During the fiscal second quarter, the company reported higher pricing on bookings courtesy of the limited remaining inventory for 2024. It reported strength in pricing for the North America and Australia (NAA) and Europe segments for the third and fourth quarters of 2024 on a year-over-year basis. The company's efforts to extend the booking curve and leverage favorable pricing trends resulted in record cumulative bookings for the remainder of 2024, with occupancy rates above 2023 levels.

Total customer deposits as of May 31 were $8.3 billion compared with $7 billion reported in the previous quarter. The amount was higher than $7.2 billion reported on May 31, 2023.

2024 Outlook

For third-quarter fiscal 2024, the company expects adjusted EBITDA to be approximately $2.66 billion. It expects fiscal second-quarter adjusted net income to be nearly $1.58 billion. The company expects fiscal third-quarter adjusted EPS to be $1.15.

For fiscal 2024, the company anticipates adjusted EBITDA to be approximately $5.83 billion compared with the previous expectation of $5.63 billion. Adjusted net income during the year is anticipated to be nearly $1.55 billion, up from the previous expectation of $1.3 billion. In the fiscal 2024, the company expects adjusted EPS to be $1.18 compared with the previous expectation of 98 cents.

Zacks Rank and Stocks to Consider

Currently, Carnival carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:

Royal Caribbean Cruises Ltd. RCL currently sports a Zacks Rank of 1 (Strong Buy). RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has rallied 58.9% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.

The Zacks Consensus Estimate for RCL’s 2024 sales and EPS calls for growth of 16.8% and 63.8%, respectively, from the year-ago levels.

AMC Entertainment Holdings, Inc. AMC currently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 38%, on average. The stock has gained 12.3% in the past three months.

The Zacks Consensus Estimate for AMC’s 2025 sales and EPS suggests an improvement of 12.9% and 42.3%, respectively, from the year-ago levels.

Strategic Education, Inc. STRA currently carries a Zacks Rank #2. STRA has a trailing four-quarter earnings surprise of 36.2%, on average. The stock has surged 54.9% in the past year.

The Zacks Consensus Estimate for STRA’s 2024 sales and EPS indicates an increase of 6.4% and 33.3%, respectively, from year-ago levels.

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Carnival Corporation (CCL) : Free Stock Analysis Report

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