Carnival earnings preview: All at sea

Carnival cruise ship

Embattled cruise line operator Carnival is expected to show a sharp fall in earnings when it posts its quarterly earnings on Thursday.

Airlines and cruise operators have seen their revenues all-but dry up this year as governments imposed lockdown measures in the face of the coronavirus pandemic.

This cruise operator is expected to post a quarterly loss of $1.78 per share in its upcoming report, which represents a year-over-year change of -369.7%, according to a Zacks consensus estimate.

Analysts estimate that Carnival’s revenue will hit $15.25bn by November 2021, according to a poll by Seeking Alpha. This will be up from an estimated $10bn by November 2020 based on the assumption that cruise travel opens up and returns to pre-pandemic levels.

For the year to November 2019, Carnival’s operations generated $20.8bn in revenue and almost $3bn in net income. That represents a margin of 14.375%, with normalized diluted earnings at $2.76 per share.

After several difficult months for the leisure and travel industry, cruise liners announced massive discounts in June in an attempt to bring back tourists and offset some of their massive losses.

Stock price ahead of Carnival Earnings Report

As the likelihood of a vaccine for the coronavirus becomes more of a possibility, the tourism industry is showing signs of revival in the months ahead of the new treatment being made available. Still, travel companies and cruise operators will face the challenge to adhere to new government-mandated social distancing regulations when they reopen.

However, the Centers of Disease Control and Prevention (CDC) warned that social distancing might need to be intensified if the number of coronavirus cases continues to rise rapidly. “If cases begin to go up again, particularly if they go up dramatically, it’s important to recognize that more mitigation efforts such as what were implemented back in March may be needed again,” CDC deputy director Jay Butler said.


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