How Will Carnival's (CCL) Top Line Shape Up In Q4 Earnings?

Carnival (LON:CCL) Corporation (NYSE:CCL) is expected to release fiscal fourth-quarter 2017 results on Dec 19, before market opens.

Carnival earns revenues from its Passenger Tickets business, Onboard and Other as well as Tour and Other segments, all of which are expected to perform strongly in the to-be-reported quarter on a year-over-year basis.

Shares of Carnival have rallied 25.2% so far this year, outperforming the industry’s gain of 24.6%.

Let’s see how the company’s segments are integrating to give shape to its top line.

Passenger Tickets

Segment revenues are expected to increase year over year driven by strong pricing on closing bookings on both sides of the Atlantic. The Zacks Consensus Estimate for this segment’s revenues is pegged at $3.03 billion, reflecting a year-over-year increase of 6%. In the third quarter, passenger tickets revenues increased 8.8% year over year.

Tour and Other Revenues

Revenues are likely to improve driven by the current strength in its bookings, particularly in the Caribbean, Alaska, Europe, Asia and Australia along with favorable pricing trends. The Zacks Consensus Estimate for this segment’s revenues is pegged at $41.4 million, reflecting a year- over-year increase of 23.9%. Revenues from this segment increased 4.1% year over year in the third quarter.

Onboard and Other

Carrying on the momentum of the third quarter (up 6.7% year over year), the segment is expected to record improvement in the quarter. Growth will be driven by the company’s ongoing initiatives to increase revenues.

These include offering all-inclusive spa packages, beverage packages, and specialty restaurants and strengthening its onboard bar and casino programs along with using various marketing and promotional tools. The Zacks Consensus Estimate for onboard and other segment revenues is pegged at $1.09 billion, reflecting a year-over-year increase of 6.2%.

Overall

Strength across all segments will contribute significantly toward year-over-year growth of Carnival’s total revenues, the Zacks Consensus Estimate for which is currently pegged at $4.15 billion, representing an increase of 5.8%.

Carnival Corporation Revenue (TTM)

Zacks Rank and Stocks to Consider

Carnival has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Consumer Discretionary sectorinclude Camping World Holdings (NYSE:CWH) , Care.com (NYSE:CRCM) and International Speedway Corporation (NASDAQ:ISCA) each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings per share growth rate for Camping World and Care.com is projected to be 16.5% and 15% respectively.

For International Speedway, one estimate for the current year moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for the current year increased 1.3%.

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