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What to Expect From Carnival Earnings

Carnival Corp. (NYSE: CCL) is scheduled to report its fiscal third-quarter financial results before the markets open on Tuesday. Thomson Reuters consensus estimates call for $1.62 in earnings per share (EPS) on $4.82 billion in revenue. The same period from the previous year had $1.58 in EPS on $4.95 billion in revenue.

The company announced in July something that many tourists have hoped would come about for years back. It will be able to take you and thousands of other tourists to Cuba. Or will it? Carnival’s announcement said that it has been granted U.S. licenses to operate direct cruises from the United States to Cuba. This is one of those announcements that sounds significant on the surface, but one in which is there is far more (or far less) than meets the eye.

The company noted that this travel approval was for the purpose of providing cultural exchange. It seems as though the company still has to be very muted about the opening up of Cuba in its scope under existing U.S. rules and restrictions, but you can imagine that travel demand is likely to be through the roof. Supply is another matter.

Carnival said that Fathom, its new purpose-travel brand, will begin full-week sailings to Cuba. That is the good news. The bad news: these cruises will not begin until May of 2016, and it is a 710-passenger boat.

A few analysts recently weighed in on Carnival:

  • Wedbush raised its price target to $54 from $52.
  • Barclays has an Equal Weight rating and raised its price target to $53 from $48.
  • Morgan Stanley has an Equal Weight rating and raised its price target to $54 from $49.
  • Jefferies upgraded to a Hold rating from Underperform with a $45 price target.

So far in 2015, Carnival is outperforming the market and shares are up nearly 17% year to date. In the past 52 weeks shares are up nearly 33%.

Shares of Carnival were up 0.6% at $52.38 on Monday afternoon. The stock has a consensus analyst price target of $55.02 and a 52-week trading range of $33.11 to $54.05.

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By Chris Lange