Carnival Corp falls 7% despite reporting record second quarter results

Carnival Corp (NYSE:CCL) is down today even thought its EPS is at record levels

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The stock price of Carnival Corp (NYSE:CCL) is down by 7% today after the company released second quarter results. In my view they showed that the company is executing its strategy and has a bright future ahead of it.

Adjusted net income of $489 million was ahead of 2017’s Q2 figure of $378 million. This works out as $0.68 per share, which is significantly higher than the comparable figure of $0.52 from last year. Revenue moved $500 million higher to $4.4 billion during the quarter.

The company’s performance in the second quarter represented a record in terms of its adjusted earnings. Adjusted EPS was also ahead of guidance, with the stock market expecting a figure of $0.59. Much of the gain was due to the company’s strong operational performance, with it seeking to offer high levels of customer service in order to generate demand that outpaces measured capacity growth.

Carnival also announced that cumulative advanced bookings for the next three quarters are in line with the previous year at higher prices. The company remains on track to deliver double-digit returns on invested capital in 2018. It also expects full year adjusted EPS to be in the range of $4.15 to $4.25. This compares with $3.82 in the 2017 fiscal year.

In my view, the Carnival stock price could generate relatively impressive returns over the medium term. The company’s strategy seems to be sound, and is contributing to its improving performance in my opinion.

The prospects for the global economy continue to be generally positive according to my research. As a cyclical company, this could lead to strong returns for the business in the coming years. As a result, and in spite of its stock price fall of around 7% following today’s update, I’m upbeat about the company’s outlook over the next few years.

About Robert Stephens 116 Articles
Robert Stephens is a CFA Charterholder and works as an Equity Analyst. He is a keen private investor and has bought and sold stocks for 15 years, investing in a range of sectors and markets. He has previously written for Seeking Alpha and The Motley Fool, and now runs his own business. If you would like to contact Robert, please email [email protected] or contact him via one of the other methods on the 'Contact Us' page