Carnival Says Strong Demand More than Offset Higher Fuel Costs

Dow Jones
Yesterday
 

Carnival said strong demand and operational improvements provided a lift to sales and profit during the latest quarter, more than offsetting higher fuel costs.

The cruise line said Tuesday that booking trends rebounded meaningfully over the past three months, after extreme geopolitical volatility disrupted typical patterns earlier in the year.

"Things happen in the world, and people hesitate," Chief Financial Officer David Bernstein said in an interview. "Then they realize the world's not ending ... and people get back to their life."

Shares jumped 12% to $24.90, on pace for their largest percent increase since April 2025. Despite the gain, shares have lost nearly a fifth of their value year to date.

With 2026 largely on the books, Carnival is turning its attention to the year ahead. The company is already halfway booked for 2027, with both occupancy and pricing at what it called record levels.

"Demand remains broad-based, including very healthy demand for our peak summer European deployments," Chief Executive Josh Weinstein said on a call with analysts. Beyond that, 2028 is "off to an excellent start," he added.

In addition to strong booking trends, Carnival said it generated more than $150 million of operational improvements over the past three months. The improvement stemmed in part from higher yields--or the money a cruise line makes from its passengers, net of costs--as well as cost savings and lower fuel consumption.

Taken together, strong demand and operational improvements have fully offset higher fuel costs, executives said. Carnival said it now expects fuel expenses for the year to come in at $2.25 billion, up from a previous forecast of $2.12 billion. The new outlook comes as oil prices remain elevated, though benchmarks pulled back from earlier highs after Saudi Arabia's state supplier reopened a key distribution point.

For the remainder of 2026, Carnival guided for adjusted earnings of 20 cents a share in its fiscal fourth quarter, slightly below analyst views for 24 cents a share. Net yields are now expected to climb 2.3%, up from a prior view for a nearly 1.8% increase and ahead of estimates for a 1% increase.

For its three months ended Aug. 31, Carnival posted net income of $1.92 billion, or $1.40 a share, up from $1.85 billion, or $1.33 a share, a year earlier. Stripping out certain one-time items, earnings came in at $1.43 a share. Analysts polled by FactSet expected adjusted earnings of $1.35 a share.

Third-quarter total revenue climbed 3.5% to $8.44 billion, topping Wall Street models for $8.39 billion.

 
 

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10