Carnival plc

Second-quarter 2026 net income was $569 million, more than 20% higher than the prior year and $100 million, or $0.07 per share, above March guidance. Yields rose 2.2% year over year, while cruise costs without fuel per ALBD were essentially flat and beat March guidance by about 250 basis points; that cost performance contributed $0.05 per share to the beat. Management also said fuel price was nearly 30% higher year over year, fuel consumption improved by over 5%, and customer deposits reached an all-time high of $9 billion. For the full year, Carnival now expects EPS of $2.22, up $0.01 from prior guidance due to share repurchases, normalized yield growth of about 2.25%, and cruise costs without fuel per ALBD up approximately 1.3% on a normalized basis. Net debt to adjusted EBITDA was 3.1x at quarter-end, and the company said it expects over $7 billion of EBITDA this year.

Josh Weinstein framed the quarter as evidence of strong underlying demand, better commercial execution, and operating discipline, even amid geopolitical volatility and weak consumer sentiment. He emphasized that booking trends remain strong, with 93% of the business on the books, record prices for the remaining quarters, and continued strength into 2027 and beyond. He also highlighted long-term strategy pillars: stronger revenue management, disciplined fleet investment, and a differentiated destination portfolio, while stressing that the recent yield moderation is temporary rather than structural.

David Bernstein focused on the financial beat and the mechanics behind it. He said Q2 net income of $569 million exceeded guidance by $100 million, with $0.05 per share from lower-than-expected cruise costs without fuel, $0.01 from revenue, and $0.01 from lower depreciation and better fuel consumption. For the full year, he guided to EPS of $2.22, normalized yield growth of roughly 2.25%, and normalized cruise costs without fuel per ALBD up about 1.3%; he also noted the net impact of fuel pricing and currency on guidance was less than $0.01 per share. On capital allocation, he said Carnival has repurchased over 17 million shares for more than $450 million under its $2.5 billion authorization and improved leverage from 3.4x net debt/adjusted EBITDA at year-end 2025 to 3.1x at Q2.

Analysts pressed management on why yield guidance was cut by 100 basis points and whether the entire reduction was tied to the Middle East conflict. Josh Weinstein said the biggest impact was in Europe, especially the Med, and that the disruption lasted longer than expected; he added that some occupancy was intentionally traded off to protect price integrity and that June booking trends suggest a turn. Questions also focused on 2027, with management refusing to give full guidance but saying bookings and pricing are running ahead year over year, European bookings are strong, and the loyalty-program impact is about four-tenths of a point in 2027. On Celebration Key, management said the new pier gives flexibility right away, with 2027 expected to welcome about 3.5 million visitors, but landside expansion is still in planning.