What to Expect From Carnival Earnings

Carnival Corp. (NYSE: CCL) is scheduled to release fiscal second-quarter financial results before the markets open on Tuesday. The consensus estimates from Thomson Reuters are calling for $0.39 in earnings per share (EPS) on $3.68 billion in revenue. The same period from last year had $0.25 in EPS on $3.59 billion in revenue.

Lower fuel costs and increased bookings led to a tripling of earnings at Carnival for its first fiscal quarter of 2016. The operator of Princess, Cunard, and Holland America, as well as Carnival Cruise Lines, also narrowed its fiscal year guidance citing higher bookings and prices for the rest of the year.

The company is facing some issues surrounding going forward. The recent departure of the UK from the European Union created a massive fallout in global markets. Essentially this is raising concerns going forward for Carnival regarding uncertainty in what Brexit might hold for international travel.

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On the plus side, Cuba was recently opened up as a destination port for Carnival. The company said earlier this quarter that it has reached agreement with Cuba to allow the company’s ships to visit the country for the first time in more than 50 years. The Cuban stops began on May 1.

A few analysts weighed in on Carnival prior to the release of the earnings report:

• Sterne Agee CRT initiated coverage with a Buy rating and a $60 price target.
• Tigress Financial upgraded to a Buy rating from Neutral.
• Morgan Stanley has an Equal Weight rating with a $54 price target.
• Credit Suisse reiterated a Buy rating with a $60 price target.
• Nomura reiterated a Buy rating with a $62 price target.
• Citigroup reiterated a Buy rating with a $58 price target.

So far in 2016 Carnival has underperformed the broad markets with the stock down 15% year to date, excluding Monday’s move. Over the past 52-weeks, the stock is down only 6%.

Shares of Carnival were last trading down 4.7% at $43.49, with a consensus analyst price target of $60.19 and a 52-week trading range of $40.52 to $55.77.