Carnival Outperforms in Q3 While Providing a Strong Outlook for Cruising
Demonstrating the strength in the cruise industry and its ability to navigate global challenges, Carnival Corporation reported quarterly results with all-time highs in revenues, net income, and yields, while presenting a strong outlook. Indeed, management said accelerating demand and even stronger cost discipline drove “results ahead of our expectations.”
CEO Josh Weinstein pointed to accelerated bookings that had started in June and carried through the quarter. Despite concerns over the economy and geopolitical disturbances, he believes consumers are placing a high value on vacation experiences. He emphasized the value for the dollar that the company’s brands provide while reporting they are already half booked for 2027. “Looking further ahead, 2028 is also off to an excellent start at higher occupancy and prices than last year.”
He also pointed to volumes that were “meaningfully ahead of last year,” while critically highlighting that it is far outpacing capacity growth. Carnival Corporation is taking a pause this year in new ship deliveries as an aftereffect of the COVID-19 pandemic. It is scheduled to resume deliveries next year, but only has five ships on order, all for its Carnival Cruise Line brand. Weinstein has said going forward the company will have a more measured pace for newbuilds.
The company reported a $150 million impact from fuel costs, but said it had been able to overcome that through strong cost controls along with improvements in net yields. This was also despite a close-in 2025 decision to redeploy capacity away from the previously planned first quarter 2026 Arabian Gulf voyages.
The corporation achieved an all-time high net income in the third quarter of $1.9 billion on revenues of more than $8.4 billion. Analysts noted that some of the strongest growth appeared to be coming from Carnival’s “Onboard & Other” segment, likely demonstrating passengers' willingness to spend for extras aboard the ships and the revenues coming from the new Celebration Key destination on Grand Bahama and the completed renovations at both the newly named RelaxAway destination, Half Moon Cay in the Bahamas, and Isla Tropicale at Roatán in Honduras. The company reported almost 2.5 million guests at Celebration Key in its first year, and more than 250,000 guests each at the other private destinations.
As an indicator of the strong outlook, the company said consumer deposits for future cruises were at record levels in the third quarter, up nearly seven percent compared to the prior year. Deposits reached $7.6 billion, setting a new record, up by $0.5 billion despite the corporation’s flat capacity growth over the next 12 months.
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"Taken together, the ongoing strength we are seeing across our record booking curve, which has extended out even further, reinforces our confidence in the durability of demand for our cruise lines and the earnings power of our business," concluded Weinstein.
Investors were pleased by the better-than-expected results and strong outlook. The stock price was up more than 13 percent on a day when the major indices were all lower. Management said that while it was putting its increasingly durable cash flow to work with reinvestments in the business, it was also committed to returning more capital to shareholders after it restored its dividend this year, the first time since the 2020 pandemic.
