Gillian Tan is a Bloomberg Gadfly columnist covering deals and private equity. She previously was a reporter for the Wall Street Journal. She is a qualified chartered accountant.

Carnival Corp.'s shareholders are hard to please. 

The cruise-line operator reported the strongest quarterly earnings in its history on Monday and in response, investors drove down the stock as much as 3.1 percent. Carnival should be at least somewhat used to this by now: Its shares have closed in the red after three of its previous nine consecutive quarters of earnings beats. 

Wall Street analysts reckon the cruise operator's shares will rally by more than 20 percent in the next year
Source: Bloomberg

Year to date, Carnival's stock has lost roughly 15 percent. While the shares have fared better than rivals Norwegian Cruise Line and Royal Caribbean Cruises (down 38 percent and 30 percent, respectively), the $34 billion company is still trading at a discount to its five-year average relative to both revenue and Ebitda, according to data compiled by Bloomberg. 

Back Foot
Market watchers have been discounting Carnival, which trails the industry average and its rivals. Short interest in the cruise operator has climbed to its highest level since 2008.
Source: Bloomberg Intelligence

Miami-based Carnival is doing what it can to bridge the gap, spending $700 million this quarter (and almost $2.5 billion over the past 12 months) on stock buybacks. But that hasn't been enough to satisfy everyone.

Some investors are even ratcheting up their bets against Carnival, with short interest as a percentage of free float rising to 7.9 percent as of Friday, according to Markit. That's the highest level since 2008, when Carnival slumped 45 percent in what was the stock's worst performance in the cruise line's three-decade history as a public company.

Notably, 2016 isn't anything like 2008. And despite fuel and currency headwinds, Carnival's adjusted earnings per share is poised to climb this year to a record $3.35 a share.

Anchors Aweigh
Carnival Corp on Monday reiterated its 2016 guidance, affirming what should be a record in its 30th year as a publicly traded company
Source: Bloomberg

The momentum appears set to continue, with Carnival already seeing more first-half 2017 bookings at higher prices than the same period a year earlier. That's the case even in the Caribbean for the company's American lines, reflecting the negligible impact (for now) of Zika on its namesake Carnival Cruise Line, Holland America and Princess Cruises. Rather than being discouraged, investors should be buoyed. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Gillian Tan in New York at

To contact the editor responsible for this story:
Beth Williams at