Carnival (CCL) Q2 Earnings and Revenue Lag Estimates, Y/Y Upside – June 24, 2022

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Carnival Corporation & plc (CCA Free Report) reported mixed results for the second quarter of fiscal 2022 (ended May 31, 2022), with earnings and revenue falling short of Zacks’ consensus estimate. Both metrics trailed the consensus mark for the seventh consecutive quarter. Nevertheless, turnover and net income improved year on year.

During the quarter, the company’s operations were impacted by the effects of the coronavirus, inflationary pressures and rising fuel prices. Additionally, CCL has witnessed occupancy constraints on some voyages due to onboard personnel issues.

In the quarter under review, the company reported a loss per share of $1.64, higher than the Zacks consensus estimate of a loss of $1.14. In the prior year quarter, the company posted a loss per share of $1.80.

Revenue for the quarter totaled $2,401 million, which was below the consensus mark of $2,834 million. Revenue improved significantly from the $50 million in the prior year quarter. Revenue from passenger and onboard tickets and other was $1,285 million and $1,116 million, respectively.

Q2 financials

During the second fiscal quarter, the company reported an adjusted net loss of $1.9 billion. GAAP net loss for the quarter was $1.8 billion.

In the second quarter of fiscal 2022, the occupancy rate was 69%, compared to 54% in the prior quarter. Lower Available Berthage Days (“ALBD”) during the quarter were 16.7 million, representing 74% of total fleet capacity, compared to 60% in the first quarter of fiscal 2022.

For cruise segments, revenue per PCD for the second quarter of 2022 declined slightly from robust 2019 levels.

Balance sheet

Cash, cash equivalents and short-term investments as of May 31, 2022 were $7.2 billion, compared to $6.9 billion in the prior quarter. Carnival ended the quarter with cash of $7.5 billion. Total debt (current and long-term) as of May 31, 2022 was $35.1 billion, compared to $34.9 billion as of February 28, 2022.

Adjusted EBITDA as of May 31, 2022 was $(928) compared to $(962) in the prior quarter.

Update reservations

During the second fiscal quarter, the company raised its booking position for the second half of 2022. Cumulative advance bookings for the second half of 2022 are below the historical range. The company said cumulative early bookings for the first half of 2023 are at the upper end of historical ranges and at higher prices than 2019 levels.

Carnival’s President, CEO and Chief Climate Officer, Arnold Donald, said: “It is encouraging to see that demand continues to be strong, with our customers overcoming far more restrictive protocols than mainstream society and travel in their together, resulting in a near doubling of booking volumes since last quarter, with short-term bookings even exceeding those of 2019. We have been encouraged by tight demand and remain focused on optimizing occupancy while preserving long-term price.

Meanwhile, total customer deposits as of May 31 were $5.1 billion, compared to $3.7 billion as of February 28, 2022. As of June 24, 2022, 91% of the company’s capacity had resumed its cruising activities.

Tips

The company continues to expect a net loss for the third quarter and fiscal year 2022. Given the ongoing recovery of guest cruise operations, the company expects continued improvement in adjusted EBITDA and revenue growth. occupancy throughout 2022. It expects to report positive adjusted EBITDA and occupancy (of 110%) in the third quarter of 2022.

Zacks Ranking and Stocks to Consider

Currently, Carnival has a Zacks rank of #4 (sell).

Some top-ranked stocks in Zacks’ Consumer Discretionary sector are Civeo Corporation (CVEO free report), Funko Inc. (FNKO free report) and Bluegreen Vacations Holding Corporation (BVH free report).

Civeo sports a Zacks rank #1 (Strong Buy) at present. The company has a four-quarter earnings surprise of 1,565.1% on average. Shares of the company have soared 38.4% over the past year. You can see the full list of today’s Zacks #1 Rank stocks here.

The Zacks consensus estimate for CVEO sales and EPS in 2022 suggests growth of 12.5% ​​and 1,450%, respectively, from prior year period levels.

Funko sports a Zacks Rank #1 at present. FNKO has a surprise on earnings for the last four quarters of 78.7%, on average. Shares of the company are up 7.5% over the past year.

Zacks’ consensus estimate for Funko’s current fiscal year sales and EPS suggests growth of 26.8% and 31%, respectively, from reported levels in the prior year period.

Bluegreen Vacations boasts a No. 1 Zacks rank. BVH has a trailing four-quarter earnings surprise of 85.9% on average. The stock has jumped 38.6% over the past year.

Zacks consensus estimate for BVH’s current year sales and EPS indicate growth of 11.2% and 35.1%, respectively, from reported levels in the prior year period .

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