Carnival
stock was falling sharply Monday despite the cruise company posting a narrower-than-expected fiscal second-quarter loss amid what it called “continued acceleration of demand.”
Carnival (ticker: CCL) recorded a second-quarter loss of 32 cents a share—narrower than the loss of 34 cents expected by analysts, according to FactSet. In the same period last year, it posted a loss of $1.61 a share.
“With bookings and customer deposits hitting all-time highs, we are clearly gaining momentum on an upward trajectory,” CEO Josh Weinstein said in the earnings release. Carnival said total customer deposits reached an all-time high of $7.2 billion as of May 31, topping the previous record of $6 billion from May 31, 2019.
Sales for the period were $4.91 billion, higher than the $4.79 billion Wall Street forecast. A year ago, the cruise company posted sales of $2.401 billion.
For fiscal 2023, the company expects adjusted earnings before interest, tax, depreciation, and amortization of $4.1 billion to $4.25 billion, “above March guidance’s range and with a midpoint increase of $175 million.”
Shares were sliding 11% to $14.07 on Monday, putting it on pace for its largest percent decrease since November 2022, when it lost 14%, according to Dow Jones Market Data. It also was the worst performer in the
S&P 500
on Monday.
“Good news aside, the stock is up nearly 70% since they last reported in March and we suspect 2Q results will make it difficult for the stock to outperform today; we’ll call it ‘sell on the news’ today,” wrote Truist Securities analysts led by Patrick Scholes. Truist rates the shares at Sell with a price target of $11.
Stifel analysts led by Steven Wieczynski, who rate shares as Buy with a price target of $18, also believed shares were going to “sell the news,” but they remained upbeat on the stock.
The boost in Ebitda guidance was surprising, Wieczynski said, which indicates strength in booking and pricing trends.
Peers
Royal Caribbean
(
RCL
) and
Norwegian Cruise Line
(NCLH) were also in the red, declining 2.2% and 5.5%, respectively.
Write to Emily Dattilo at [email protected]
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