Carnival Corp Beats Earnings, Raises Guidance Despite Stock Decline
Reporting Date: Sept 29, 2025 (BMO)
Stock Performance: Closed at $29.40, down −1.22 (−3.98%) today despite a beat-and-raise quarter.
Results vs. Preview Expectations
| Metric | Reported Q3 2025 | Preview / Consensus Estimate | Prior Year Q3 2024 |
|---|---|---|---|
| Revenue | $8.24B | $8.10B | $7.90B |
| EPS (Adj.) | $1.35 | $1.32 | $1.27 |
| Net Income | $1.78B | n/a | $1.68B |
| Occupancy | ~106% | Expected ~105% | ~105% |
| Onboard Spend per Pax | +6% YoY | Modest increase expected | +5% YoY |
Outcome: Carnival delivered a beat on both revenue and EPS, exceeding consensus expectations.
Financial Highlights
- Revenue: $8.24B, +4.3% YoY. Driven by ticket yields and onboard spending.
- EPS: $1.35, topping the $1.32 preview estimate.
- Net Income: $1.78B, vs. $1.68B a year ago.
- Margins: Operating margin ~13%, showing slight expansion.
- Cash Flow: Positive free cash flow, used for debt paydown.
Management Commentary
- Bookings: Record forward bookings, higher pricing YoY.
- Customer Growth: Surge in new-to-cruise passengers.
- Costs: Unit costs ex-fuel declined, helping EPS beat.
- Guidance: FY25 EPS raised to ~$2.40 (from $2.34). Revenue now guided to ~$33.5B.
- Tone: Optimistic, citing visibility into 2026.
Peer Comparison (FY25E)
| Metric | Carnival (CCL) | Royal Caribbean (RCL) | Norwegian (NCLH) |
|---|---|---|---|
| Revenue | $33.5B (raised) | $18.5B | $8.2B |
| EPS | $2.40 (raised) | $13.05 | $1.90 |
| Operating Margin | ~13% | ~23% | ~14% |
| Debt/EBITDA | ~4.7x | ~3.5x | ~5.2x |
| Market Cap | ~$33B | ~$44B | ~$7B |
Market Reaction
Despite the earnings beat and raised guidance, shares closed at $29.40, down 3.98%. This suggests investors may be cautious about valuation, leverage, or broader market risk sentiment.
Bottom Line
Carnival delivered a strong quarter — beating revenue and EPS estimates while raising full-year guidance. However, today’s stock decline highlights lingering investor concerns around high leverage, cost inflation, and macroeconomic headwinds. Execution into 2026 remains key for narrowing the profitability gap with Royal Caribbean.