What to Watch When Carnival (CCL) Reports Earnings Tuesday

NEW YORK (TheStreet) -- Shares of Carnival Corp  (CCL) were up 1.61% to $49.71 on heavy volume in late afternoon trading Monday, a day ahead of the cruise vacation company's second quarter earnings release, before the market opens Tuesday.

For the quarter, the company is expected to earn 16 cents per share on revenue of $3.563 billion, according to analysts surveyed by Thomson Reuters.

In the same period a year ago, Carnival posted a profit of 10 cents per share on sales of $3.63 billion.

About 4.81 million shares have changed hands as of 3:20 p.m. ET today, compared to its average trading volume of about 2.91 million shares a day.

Miami-based Carnival is a cruise vacation company with three cruise segments.

The company offers its services under nine cruise brands. Its North America segment cruise brands include Carnival Cruise Lines, Holland America Line, Princess Cruises and Seabourn. 

Separately, 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 solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

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

  • Powered by its strong earnings growth of 300.00% and other important driving factors, this stock has surged by 25.89% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CCL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • CARNIVAL CORP/PLC (USA) reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, CARNIVAL CORP/PLC (USA) increased its bottom line by earning $1.58 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($2.47 versus $1.58).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 345.0% when compared to the same quarter one year prior, rising from -$20.00 million to $49.00 million.
  • Net operating cash flow has significantly increased by 61.63% to $771.00 million when compared to the same quarter last year. In addition, CARNIVAL CORP/PLC (USA) has also vastly surpassed the industry average cash flow growth rate of -11.65%.
  • You can view the full analysis from the report here: CCL Ratings Report

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