Carnival (NYSE:CCL) Guidance Probably Upbeat for 2011

Expectations from Carnival (NYSE:CCL) for their upcoming guidance outlook is expected to be more upbeat, says Barclays (NYSE:BCS).

Barclays said, "We expect Carnival (on 12/21) to provide an upbeat outlook regarding the year ahead, as we believe demand trends have improved since the FY3Q10 conference call. Given the potential headwind from increased fuel prices both in FY4Q10 and for FY2011, we are trimming our EPS estimates. We would urge investors to focus more on Carnival's positive net yield metrics versus the impact of exogenous factors such as fuel. Carnival trades at a 2012E P/E of 12.1 times, versus our fair valuation estimate of 15 times. Given improving demand, a favorable mix shift to Europe in 2011 and slowing supply beyond, we believe Carnival and the industry is at an inflection point, which current trading levels are not reflecting, in our view.

"...We now believe 4Q10 will come in around $0.30 given the impact of the voyage disruptions ($0.07) and higher fuel costs ($0.03), somewhat offset by the weakening US dollar, which we estimate is equal to +$0.02 to 4Q EPS...Rising fuel costs could create noise in the company's 2011 EPS guidance. Ahead of Carnival's earnings release, we are lowering our prior EPS estimate of $3.07 to $2.90 given upward estimate revisions to our 2011 fuel outlook. This compares to consensus of $2.93."

Carnival closed Thursday at $42.54, up $0.39, or 0.93 percent.