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Why Did Carnival Corporation’s Stock Price Move Higher?

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Dec. 23 2015, Published 9:39 a.m. ET

Stock movement

The stocks of Carnival Corporation (CCL) traded higher when the company released earnings that were better than expected on Friday, December 18, 2015. The company was able to beat consensus estimates for earnings. However, it fell short of revenue estimates. The company’s shares rose by about 4.4% during the result day and were boosted by a quarterly dividend of $0.30 per share that was paid a week ago.

The company reported earnings per share of $0.50, beating the consensus estimates of $0.41 by a comfortable margin. This was up from the earnings per share of $0.27 in the previous year. However, revenues fell to $3.71 billion for the quarter, missing the analyst estimates by $10 million.

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Peer comparison

The stock of Carnival has gained 19% YTD (year to date). In the same period, peers Royal Caribbean (RCL) and Norwegian Cruise Line Holdings (NCLH) managed to outperform Carnival marginally. RCL gained 20% in the same period, and NCLH gained 26%.

The Dow Jones US Travel & Leisure Index rose 4% in the same period. The PowerShares Dynamic Leisure & Entertainment ETF (PEJ), with its largest holding of 5.3% in RCL, rose 3%.

The broader market, as tracked by the SPDR S&P 500 ETF Trust (SPY), fell by ~2% in the same period.

Series overview

In this series, we’ll analyze Carnival’s 4Q15 results in detail. We’ll examine what drove CCL’s revenue and profits, and also discuss the management’s outlook for the company and the industry. Finally, we’ll compare CCL’s valuation to its peers. For a complete overview on CCL, check our investor’s guide to Carnival, the world’s largest cruise company.

In the next article, let’s look at CCL’s performance in the latest quarter.

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