Carnival shares fell sharply on Monday, although the cruise line posted a slightly smaller-than-expected loss for the fiscal second quarter amid “continued rising demand.”
According to FactSet, Carnival (ticker: CCL) posted a loss of 32 cents per share in the second quarter — less than the 33 cents loss analysts were expecting. In the same period last year, the company posted a loss of $1.61 per share.
“With bookings and customer deposits hitting all-time highs, we are clearly gaining momentum on an uptrend,” CEO Josh Weinstein said in the earnings release. According to Carnival, total customer deposits reached an all-time high of $7.2 billion as of May 31, beating the previous record of $6 billion set on May 31, 2019.
Revenue for the period was $4.91 billion, beating Wall Street’s forecast of $4.79 billion. A year ago, the cruise company had sales of $2.401 billion.
For fiscal 2023, the company expects adjusted earnings before interest, taxes, depreciation and amortization of $4.1 billion to $4.25 billion, “above the March guidance range and with a median increase of $175 million.”
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The stock fell 7.7% to $14.59 on Monday, the sharpest percentage drop since November 2022, when it lost 14%, according to Dow Jones Market Data. It was the bottom of the S&P 500 on Monday.
“Good news aside, the stock is up nearly 70% since it last reported it in March and we suspect second quarter results will make it difficult for the stock to outperform today; We’re going to call it Sell on the News today,” wrote analysts at Truist Securities, led by Patrick Scholes. Truist has a Sell rating on the shares with a price target of $11.
Stifel analysts, led by Steven Wieczynski, who rates the stock as a “buy” with a price target of $18, also believed investors would “sell the news” but remained bullish on the stock.
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The increase in the Ebitda forecast came as a surprise, Wieczynski said, indicating strength in booking and pricing trends.
Competitors Royal Caribbean (RCL) and Norwegian Cruise Line (NCLH) were also down, down 0.7% and 4.5%, respectively.
Write to Emily Dattilo at [email protected]