Before the market opens tomorrow morning, Carnival Corporation (NYSE: CCL) will be reporting its fiscal third quarter earnings results.The last time the company reported earnings was back on June 18 when it was able to post 33 cents per share, above the 29 cents that analysts had been expecting. This time analysts are looking to see the company show earnings of $1.18.
There are reasons to be both optimistic and pessimistic going into tomorrow's earnings release. The company has been dealing with fear over the swine flu which has kept a lot of would be travelers at home, but its bookings are looking decent. The company has been discounting its tickets which has helped boost bookings by about 25% over last year.
While the discounted prices have helped boost bookings, there is reason to believe this may not be enough. It has been estimated that travelers have been spending around 13% less while on their trips.
Analyst take: Sharon Zackfia, an analyst with William Blair is looking to see the company post better than expected numbers in the morning. Zackfia believes that Carnival should benefit from recent cost cutting measures and decreasing fuel costs. She is expecting good numbers and to see the company boost its full year 2009 guidance due to strong Q1 bookings.
Not everyone is so optimistic. Goldman Sachs analyst Steven Kent is not very enthusiastic regarding cruise stocks. He believes that the sector is going to continue to under perform competing industries such as hotels. He stated that Carnival's business is going to continue to be impacted by higher oil prices, and possible back lash from tourists fearing to travel due to the H1N1 swine flu virus.
Investors will definitely be paying attention during tomorrow's conference call to hear what impact the company believes the swine flu will have on its business as we head into this year's flu season.
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