Cruise giant Carnival reported fiscal second-quarter results early Monday as industry and travel demand remains strong heading into the summer vacation season. CCL stock rallied Wednesday after rebounding strongly Tuesday. Shares sank Monday following results.
Carnival's adjusted loss improved to 31 cents per share compared with a loss of $1.65 per share last year. Revenue doubled to a second-quarter record $4.91 billion from $2.4 billion last year. Total customer deposits hit a record $7.2 billion as of the quarter's end on May 31. That surpassed the previous record of $6 billion from May 31, 2019.
CCL stock analysts polled by FactSet expected Carnival to report a loss 34 cents per share on $4.79 billion in sales.
Carnival expects third-quarter earnings before interest, taxes, depreciation and amortization, or EBITDA, between $2.05 billion and $2.15 billion. It sees adjusted net income ranging from $950 million to $1.05 billion. For fiscal 2023, Carnival guided adjusted EBITDA between $4.1 billion and $4.25 billion with 100% occupancy or higher. FactSet predicts full-year EBITDA at $4.06 billion.
The company expects to return to profitability in the second half of fiscal 2023 while it works to pay down its debt, Chief Financial Officer David Bernstein noted in the release.
The cruise operator has recorded quarterly losses since the second quarter of 2020 as the coronavirus pandemic sunk travel demand. But the losses steadily improved since the end of 2021 while revenue recovers near its pre-pandemic levels.
CCL Stock: Price Targets Raised
Deutsche Bank raised its price target on CCL stock Friday to 15 from 10. It maintained a hold rating on shares ahead of its second-quarter report.
The upgrade followed Barclays' price hike Wednesday to 18 from 13 per share. Barclays kept its overweight rating on shares. The firm noted the cruise industry is "closing the gap" between its pricing and land based vacations. Meanwhile, Carnival is closing its own operating gap with its seafaring peers, Barclays said.
Bank of America raised its price targets on a fleet of cruise ship stocks on June 12 and upgraded Carnival stock to a buy rating. BofA noted that industry demand remains steady and pricing environments are behaving well. Further, BofA noted after a meeting with industry representatives that booking trends are in line with company expectations.
The bank also raised its price targets for Royal Caribbean and Norwegian Cruise Line shares to 95 and 19, respectively. Bank of America raised its price target on Carnival stock to 20 from 11.
Shares Drop After Premarket Surge
CCL stock rallied 8.8% to 17.30 Wednesday. Shares rebounded about 8.8% Tuesday after it dove 7.66% Monday. That drop came even though shares surged more than 2% premarket Monday leading up to the report. It wasn't immediately apparent what caused the stock to drop.
CCL stock vaulted 37% after breaking out from a cup base on June 6 and are trading in a profit-taking zone.
Carnival stock has bolted 115% so far this year.
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