Investing

Earnings Previews: Carnival, Micron, Nike

The three major U.S. equity indexes closed mixed on Tuesday. The Dow Jones industrials ended Tuesday down 0.43%, while the S&P 500 closed lower by 0.21% and the Nasdaq saw a gain of 0.25%. Seven of 11 sectors closed lower, with consumer staples (1.76%) and utilities (1.70%) leading the decliners. Energy posted the day’s largest gain (1.16%). Futures traded lower again Wednesday morning, and all three major indexes were down.

The weekly report on U.S. crude oil inventories is due Wednesday morning. Tuesday’s report from the American Petroleum Institute showed a build of 4.15 million barrels last week, far above the 330,000 consensus estimate. The huge difference is down to a 4.6 million barrel release from the U.S. Strategic Petroleum Reserve. So far this year, the SPR has sold 166 million barrels of crude.

After U.S. markets closed on Tuesday, BlackBerry reported quarterly results that beat consensus estimates on both the top and bottom lines. Shares traded down about 2.6% in Wednesday’s premarket due to a dip in the company’s cybersecurity business that could not be offset by a gain of 28% in the firm’s automotive segment.

Before markets opened on Wednesday, Paychex beat consensus estimates on both the top and bottom lines. The company also issued upside guidance for fiscal year earnings per share (EPS). Shares traded up about 2.9% early Wednesday.

After markets close Wednesday and first thing Thursday morning, Bed Bath & Beyond, CarMax and Rite Aid will report quarterly results.

Here is a look at three companies reporting quarterly results on Thursday and Friday.

Carnival

Cruise ship operator Carnival Corp. & PLC (NYSE: CCL) will report quarterly results at 10:00 a.m. ET Friday. Over the past 12 months, Carnival stock has dropped about 64%. Shares reached a 52-week high one year ago and have been balling ever since. The company has posted 10 consecutive quarterly losses, beginning in the March quarter of 2020. Only once was the loss smaller than the consensus estimate. Analysts are expecting the losses to continue but to narrow.

Analysts remain cautious on the stock, with eight of 23 analysts having a Buy or Strong Buy rating and another 10 assigning a Hold rating. At a recent share price of around $9.20, the upside potential based on a median price target of $12 is 30.4%. At the high target of $36, the upside potential is 291.3%.

For the company’s third quarter of fiscal 2022, analysts have forecast revenue of $4.91 billion, which would be up nearly 105% sequentially and by about nine times year over year. The company reported revenue of $546 million in the same period a year ago. The adjusted loss per share is forecast at $0.15, much smaller than the prior quarter’s loss of $1.64 and also much better than last year’s quarterly loss of $1.75 per share.

For the full 2022 fiscal year ending in November, Carnival is expected to post a per-share loss of $3.78, compared with last year’s loss of $7.06 per share. Revenue is forecast to reach $13.48 billion, up more than 600% year over year. Carnival posted revenue of $1.91 billion in fiscal 2021.

Carnival is expected to post EPS of $0.96 in its 2023 fiscal year and $1.52 in fiscal 2024. The stock’s 52-week trading range is $8.10 to $26.99. The company does not pay a dividend. Total shareholder return for the past year is a negative 65%.

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