Carnival Corporation & plc

Q3 was a record quarter for Carnival, with revenues, yields, and reported net income all reaching new highs. Net income exceeded June guidance by over $100 million, or $0.08 per share. Yields increased nearly 2.5% year over year, and cruise costs excluding fuel per ALBD rose only 1.8% year over year, 100 basis points better than June guidance. Fuel consumption was nearly 4% lower year over year in the quarter. For the full year, management now expects yield growth of approximately 2.3% and EPS of $2.24, up $0.02 from prior guidance; fourth-quarter yields are now expected to grow about 1.7% year over year, or about 2.3% on a normalized basis. Customer deposits hit a record of approximately $7.6 billion, and total debt is now below $24 billion.

Josh Weinstein struck an upbeat, operationally focused tone, saying the company is seeing record results and that its strategy is working through both strong demand and disciplined execution. He emphasized that Carnival is staying focused on improving the cruise business, not pursuing land-based expansion for its own sake, and framed destinations like Celebration Key and RelaxAway as high-return bolt-ons that enhance the cruise product. He also pointed to growing 2027 and 2028 bookings, record occupancy and pricing, and early evidence that the company is capturing PROPEL benefits ahead of schedule.

David Bernstein detailed the quarter’s beat versus guidance, saying third-quarter net income was more than $100 million above June guidance, driven by revenue, cost, and fuel-consumption upside. He noted yields were up nearly 2.5% year over year, cruise costs excluding fuel per ALBD rose just 1.8% year over year, and fuel consumption fell nearly 4% in the quarter; for the full year, he said the company expects more than $150 million of net income improvement versus June guidance, with yield growth of about 2.3% and EPS of $2.24. On capital allocation, he said Carnival has repurchased nearly $1.2 billion of stock, expects nearly $2 billion of total shareholder returns including dividends, total debt is below $24 billion, and the company redeemed $500 million of 7% notes while finishing the quarter with no remaining secured debt after an S&P upgrade.

Analysts pressed on 2027 demand, Caribbean capacity, Europe exposure, and whether Carnival would consider hedging fuel or expanding capacity more aggressively now that it is investment grade. Management said the spring booking disruption was temporary, that Q1 2027 still has some residual impact but bookings have improved meaningfully, and that Europe is strengthening while the Caribbean remains important but can face pressure when capacity is high. On fuel, Josh Weinstein reiterated that Carnival prefers to reduce consumption rather than hedge, saying lower fuel use is the best long-term defense; on capital intensity, David Bernstein said non-newbuild CapEx was $2.4 billion in 2026 and should step up somewhat, but management is not guiding 2027 yet.