Carnival (CCL) Falls Despite Record Bookings in January

NEW YORK (TheStreet) -- Carnival Cruise Lines (CCL) announced it set a one-month record reservation record in the month of January, with reservations up 17% from the year-ago period.

Despite the record numbers, shares of the cruise company fell 1.4% to $38.65.

Between Jan. 1 and Jan. 31, 2014 Carnival saw net bookings (new reservations minus cancellations) of more than 565,000 guests. In addition to the record bookings, the company says its Web site saw an all-time high of 13 million visits in the one-month period. The bookings were at record levels across the entire fleet of 24 ships.

"Now is the time of year when many people focus on their upcoming vacation plans and the cruise industry typically sees an escalation in booking activity. We are definitely observing a strong uptick in reservations with bookings coming in at unprecedented levels," Carnival president and CEO Gerry Cahill said in a press release.

TheStreet Ratings team rates CARNIVAL CORP/PLC (USA) as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CARNIVAL CORP/PLC (USA) (CCL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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

  • CCL's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.19 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • CARNIVAL CORP/PLC (USA)'s earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, CARNIVAL CORP/PLC (USA) reported lower earnings of $1.38 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($1.67 versus $1.38).
  • In its most recent trading session, CCL has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.

More from Markets

Billionaire Investor Tim Draper Explains Why Bitcoin Will Hit $250,000 in 2022

Billionaire Investor Tim Draper Explains Why Bitcoin Will Hit $250,000 in 2022

To Think a Trade War's Still Just a Threat Is the Dumbest Thing on Wall Street

To Think a Trade War's Still Just a Threat Is the Dumbest Thing on Wall Street

M&A Trends Still on Investors' Minds Despite Worries Over Tariffs -- ICYMI

M&A Trends Still on Investors' Minds Despite Worries Over Tariffs -- ICYMI

Dow Falls as U.S. Imposes Tariffs on $50 Billion of Chinese Goods

Dow Falls as U.S. Imposes Tariffs on $50 Billion of Chinese Goods

General Motors Spikes on Report It's Considering Listing Shares of Cruise Unit

General Motors Spikes on Report It's Considering Listing Shares of Cruise Unit