Carnival Shares Slide After Issuing Dull Guidance


Carnival Corp. (CCL: NYSE)

Shares of Carnival Corp. tumbled in the regular session on Thursday after the company provided a weaker outlook for the current quarter. The largest cruise line in the world is struggling to hike fares and blamed unfavorable changes in currency exchange rates and fuel prices for its weak outlook.

However, the company reported both fourth quarter and full year results that topped estimates on both top and bottom lines. Carnival Corporation shares were down 9.42% to $49.83 a share as of 1 p.m. GMT-5. The stock has lost 23% over the last three months compared to the S&P 500 decline of 15%.

CCL Earnings & Outlook

Net income for the last quarter dropped to $494 million, or $0.71 per share, from $546 million or $0.76 per share a year earlier. Excluding special items, earnings were $492 million, or $0.70 per share, compared to $452 million, or $0.63 per share in the year ago period. Analysts surveyed by Factset were expecting adjusted earnings of $0.69 per share.

Revenue increased to $4.46 billion from $4.26 billion in the year-ago period and topping analyst estimate of $4.45 billion. Carnival Corp. earned adjusted full year net income of $3.0 billion or $4.56 a share compared to $2.8 billion or $3.82 per share reported last year. The streets were looking for adjusted earnings of $4.25 a share. Revenue for fiscal 2018 rose to $18.9 billion from $17.5 billion reported in fiscal 2017.

Carnival Corp. expects adjusted earnings per share of between $0.40 and $0.44 for the current quarter. For fiscal 2019, it expects adjusted earnings per share in the range of $4.50 to $4.80. Current Wall Street estimates are adjusted earnings of 47 cents a share and $4.69 a share for the first quarter and fiscal 2019, respectively.

Carnival Corp. CEO Comments

Carnival Corp. Chief Executive Arnold Donald stated, “We delivered strong fourth quarter earnings and record adjusted fourth quarter earnings to top off a record breaking year. In 2018, we grew net cruise revenue (constant currency) over five percent, achieving the highest revenue yields (constant currency) in our company’s history, and producing double-digit adjusted earnings growth despite a significant drag from fuel and currency.”

Carnival Corporation Company Profile

Carnival Corp. engages in the operation of cruise ships. It operates through the following segments: North America; Europe, Australia, and Asia (EEA); Cruise Support; and Tour and Other. The North America segment includes Carnival Cruise Line, Holland America Line, Princess Cruises, and Seabourn.

The Europe, Australia, and Asia (EEA) segment comprises of AIDA, Costa, Cunard, P&O Cruises (Australia), P&O Cruises (UK). The Cruise Support segment represents port destinations and private islands for the benefit of its cruise brands.

The Tour and Other segment operates hotel and transportation operations of Holland America Princess Alaska Tours. Carnival Corporation was founded in 1972 and is headquartered in Miami, Florida. – CNN Money