Carnival is Thursday's IBD Stock Of The Day, as the cruise line stock surged after Royal Caribbean trounced Q2 earnings estimates and hoisted its full-year outlook. CCL along with other cruise line stocks rallied Thursday.
Cruise line stocks have posted powerful gains through 2023 as consumers cut loose to spend on vacations delayed by pandemic lockdowns.
In late June, Florida-based Carnival reported better-than-expected Q2 financials. 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.
Another record: Total customer deposits hit $7.2 billion in quarter, ended in May. That surpassed the previous record of $6 billion from the same quarter in 2019 — before the crash on demand as the pandemic began.
The company expects to return to profitability in the second half of fiscal 2023 while it works to pay down its debt.
The cruise line operator has recorded quarterly losses since the second quarter of 2020 as the coronavirus pandemic sank travel demand. But losses steadily improved since the end of 2021 while revenue recovered near its pre-pandemic levels.
Cruise Line Stocks Jump On Royal Caribbean Results
Early Thursday, Royal Caribbean reported big Q2 revenue and earnings beats. The Miami-based operator noted that Q2 booking volumes were at record pricing levels, and "significantly higher" than the corresponding period in 2019.
Demand for 2023 sailings is well above expectations, while 2024 bookings are up significantly compared to prior years, at record prices, the cruise line reported. The company raised its adjusted full-year earnings guidance 33% to range between $6 and $6.20 per share.
"Demand for cruising and our brands is exceptionally strong and we have seen another step change in booking volumes and pricing, leading us to now expect double-digit net yield growth for the full year," Chief Executive Jason Liberty said in the earnings release.
Carnival Stock
CCL gained 53.2% to 18.22 amid higher-than-average volume Thursday during market trade. Carnival stock bounced off its 21-day exponential moving average, breaking a trendline in a short consolidation. Investors could use Monday's high of 18.01 as a buy point.
Carnival stock has erupted for about a 132% gain in 2023 and is currently around 4% below its 52-week high of 19.55. Meanwhile, collectively the 28 stocks in IBD's Leisure-Services industry group have lagged the general market.
Among other cruise lines, Royal Caribbean stock popped 8.7% Thursday. The morning move pushed Royal Caribbean shares to their highest level since February 2020. Norwegian Cruise Line jumped 2.7%. Norwegian is scheduled to report second-quarter results Aug. 1.
Carnival stock has a Composite Rating of 91 out of 99 with a 98 Relative Strength Rating. CCL also has an EPS Rating of 63 out of 99.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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