Carnival's Foul Forecast Isn't Clearing Up
21 Junio 2019 - 03:59PM
Noticias Dow Jones
By Laura Forman
Carnival Corporation may be exciting travelers at sea, but its
investors aren't having much fun.
On Thursday, Carnival surprised Wall Street with an unscheduled
earnings report for its fiscal second quarter ended May 31. Results
were mixed with adjusted earnings per share besting management's
guidance, but still falling year over year. Guidance was less
thrilling. Carnival lowered its full year earnings forecast it gave
in March from $4.35 to $4.55 to a lower, tighter range of $4.25 to
$4.35 - a forewarning of choppy waters ahead.
In a conference call for investors, Carnival cited several
factors it expected to weigh on earnings this year, including new
restrictions imposed by the Trump administration on travel to Cuba,
which took effect earlier this month. Carnival said the change,
which meant diverting Havana-bound passengers to alternate
destination ports on little notice, was "disruptive," and that it
must now select "lower-yield" destinations.
Driving Carnival's unexpected report Thursday was news that the
company would be canceling three coming voyages for the Carnival
Vista because of issues affecting the vessel's maximum cruising
speed. Carnival said it would need to remove the relatively new
ship from service for 17 days in July. It has a passenger capacity
of nearly 4,000, according to Carnival's website. The cruise line
says it operates 104 ships with 243,000 total lower berths around
the world.
Brand Ambassador and senior cruise director for Carnival John
Heald posted the Vista news Thursday on Facebook, apologizing to
customers affected and outlining compensation, which includes a
full refund and a full credit for a new cruise booking, among other
things. The post got more than 1,400 comments in a number of hours,
most of them praising Carnival's customer service. If only smiles
were free: the company said it expects voyage disruptions to
Carnival Vista to negatively impact full-year earnings per share by
as much as $0.10.
Perhaps the strongest wave came in the news of slowing demand
from travelers in continental Europe. The company said soft demand
in the region would result in lower revenue yields in the second
half of the year. A regional slowdown could disproportionately
affect Carnival relative to competitors. According to UBS leisure
analyst Robin Farley, roughly 20% of Carnival's customers come from
this area compared with about 5-7% for Royal Caribean Cruises, Ltd.
Further, Ms. Farley said some of Carnival's brands source heavily
from their home countries, including Germany's AIDA Cruises and
Italy's Costa Cruises, while lines operated by competitors have
more optionality.
Carnival's stock tanked in response to the bad news, closing
down around 8% Thursday and by another 4% by Friday afternoon.
Carnival's stock is now down more than 5% year-to-date. And while
other major cruise stocks declined in sympathy, Royal Caribean
Cruises Ltd. and Norwegian Cruise Line Holdings Ltd. were up 18%
and 21% this year through midday trading Friday, respectively.
While Carnival is known to guide conservatively and its stock is
trading near its 12-month lows based on forward price to earnings,
investors would be wise to keep their hatches battened down until
it becomes clear when European demand will rebound.
Write to Laura Forman at laura.forman@wsj.com
(END) Dow Jones Newswires
June 21, 2019 16:44 ET (20:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Carnival (LSE:CCL)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Carnival (LSE:CCL)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024