Macquarie analysts have adjusted their forecast for Carnival Corp's (NYSE:CCL) fiscal Q2 revenues, slightly lowering the expected top line due to the impact of the Red Sea tensions.
The broker now anticipates revenues to be $5.6 billion, down from the previous estimate of $5.7 billion, while also accounting for additional operational costs for the ships.
Carnival is set to unveil its earnings report on March 27.
This adjustment has led to a shift in the adjusted earnings per share (EPS) from $0.02 to a negative $0.04. However, this is somewhat mitigated by a record Wave season and ongoing strength in bookings from the second to the fourth quarter, analysts noted.
Moreover, Macquarie’s outlook for adjusted EBITDA for the fiscal years 2024 to 2026 has also been updated from $5.7 billion / $6.2 billion / $6.5 billion to $5.7 billion / $6.3 billion / $6.6 billion, respectively.
The company recently reported a record level of bookings for fiscal 2024, with prices and occupancy rates "considerably higher" on a constant currency basis compared to a year prior.
“As such, management expects the strong booking momentum to deliver outperformance relative to the prior guide, offsetting the Red Sea impact on a full-year basis,” analysts noted.
“Separately, CCL announced the redemption of $571m of 9.875% second-priority senior secured notes due '27, consistent with the Dec. guide, eliminating all the remaining second lien debt outstanding,” they added.