Key Takeaways:
- Carnival reported Q2 adjusted EPS of $0.41, beating the $0.33 consensus
- Q3 guidance of $1.35 per share fell short of the $1.42 analyst estimate
- Shares dropped nearly 6% as the outlook overshadowed record revenue of $6.7 billion
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Carnival falls 6% as Q3 guidance misses estimates despite earnings beat
Carnival Corp posted Q2 adjusted EPS of $0.41, beating the $0.33 consensus, but shares fell almost 6% after Q3 guidance missed estimates.
"The results reflect our twelfth consecutive quarter of record net yields despite extreme geopolitical headwinds and nearly 30% higher fuel costs," Chief Executive Officer Josh Weinstein said.
Revenue rose to a record $6.7 billion in the quarter ended May 31, slightly above the $6.68 billion consensus. Adjusted net income climbed more than 20% year over year to a record $569 million, while adjusted EBITDA hit $1.6 billion. Customer deposits reached an all-time high of $9 billion, up more than $450 million from the prior year's record.
For the third quarter, Carnival forecast adjusted earnings of $1.35 per share, below the $1.42 average analyst estimate. The company projected full-year 2026 adjusted earnings of $2.22 per share, also slightly below the $2.23 consensus. Carnival said it is 93% booked for 2026, with less inventory remaining for sale than at the same point last year.
Weinstein said recent booking trends suggest the company is beginning to see "a reversal of these headwinds," with demand for 2027 and beyond running ahead of prior-year levels. Carnival expects net yields to increase about 3.2% from 2025 levels, while adjusted cruise costs excluding fuel per available lower berth day are projected to rise approximately 3.7%, reflecting elevated logistics costs tied to the Middle East conflict.
The weaker guidance raises questions about peak summer season pricing power across the cruise industry. Investors will watch Carnival's next operational update for signs that booking momentum can offset the higher fuel and logistics costs embedded in its 2026 outlook.
This article is for informational purposes only and does not constitute investment advice.
