Carnival Corp. (CCL) Tumbles After Q3 Earnings Miss

September 30, 2022 11:05 AM EDT
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Carnival Corp. (NYSE: CCL) shares plummeted over 19% Friday after the company posted earnings for its latest quarter, missing earnings and revenue estimates.

The cruise line company reported a loss per share for the third quarter of $0.65, $0.54 worse than the analyst estimate of a loss of $0.11, while revenue came in at $4.31 billion versus the consensus estimate of $4.9 billion.

Bookings for the fourth quarter were said to be below the historical range and at lower prices, which Carnival put down to future cruise credits, as compared to 2019 sailings.

The company suffered significantly due to pandemic-related lockdowns, and this year, decades-high inflation has hit cruise operators.

In addition, Carnival said it expects a loss in the fourth quarter due to higher fuel prices and rising costs.

Following the report, Morgan Stanley analyst Jamie Rollo told investors in a note that Carnival's third-quarter "adjusted net income of $(0.7)bn is weaker than MSe $(0.5)bn and cons $(0.2)bn, but marks a material improvement on the losses of the previous 6 quarters (each ~$(2.0)bn)."

"Revenues of $4.3bn are weaker than MSe $4.6bn and cons $4.8bn, reflecting lower pricing. EBITDA of $303m is weaker than MSe $485m and cons $746m, reflecting weaker pricing and higher costs," added Rollo.

Stifel analyst Steven Wieczynski said in a note reacting to the report that "gross/net revenue was $4.3B/$3.2B, behind our $5.2B/$3.8B forecast and consensus of $4.8B/$3.6B."

"We were forecasting EPS of ($0.05) versus consensus at ($0.20). Revenue per passenger cruise day decreased relative to 2019 but onboard revenues continued to outpace historical levels. Management anticipates CCL will generate slightly negative EBITDA and a net loss in F4Q22. Customer deposits were $4.8B at the end of F3Q22, a ~$300M decrease from F2Q22 quarter-end," stated Wieczynski.

By Sam Boughedda

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