NEW YORK (TheStreet) -- Shares of Carnival Corp. (CCL) - Get Report are lower by -1.70% to $38.74 in early trading on Tuesday morning despite reporting an increase in non-GAAP net income to $80 million, or 10 cents per diluted share for the 2014 second quarter, compared to non-GAAP net income of $57 million, or 7 cents per diluted share for the year ago quarter.

The cruise company pasted a GAAP net income of $106 million, or 14 cents per diluted share versus $41 million, or 5 cents per diluted share for the 2013 second quarter.

Carnival's 2014 second quarter revenue was $3.6 billion versus $3.5 billion from the prior year.

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Separately, TheStreet Ratings team rates CARNIVAL CORP/PLC (USA) as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CARNIVAL CORP/PLC (USA) (CCL) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has increased to $477.00 million or 19.54% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -3.05%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 140.5% when compared to the same quarter one year ago, falling from $37.00 million to -$15.00 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, CARNIVAL CORP/PLC (USA)'s return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: CCL Ratings Report

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