Carnival Corporation & plc ((CUK)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Carnival Corporation & plc’s recent earnings call painted a picture of robust financial health, marked by record net income and positive booking trends. Despite concerns over rising interest expenses and operational costs anticipated in 2026, the overall sentiment was optimistic, buoyed by strong performance metrics and a promising future outlook.
Record Net Income
Carnival Corporation achieved a milestone with an all-time high net income of $2 billion, surpassing its pre-pause benchmark by nearly 10%. This remarkable achievement underscores the company’s strong financial recovery and operational efficiency.
Increased Yields
The company reported a 4.6% increase in yields on a same-ship basis, exceeding guidance and highlighting its robust operational performance. This increase reflects strong demand and effective onboard spending strategies.
Strong ROIC
For the first time since 2007, Carnival Corporation’s return on invested capital (ROIC) reached 13%, indicating a significant improvement in the company’s capital efficiency and profitability.
Record Customer Deposits
Customer deposits hit a record $7.1 billion for the third quarter, surpassing the previous year by over $300 million. This surge in deposits signals strong consumer confidence and future revenue potential.
Celebration Key Success
The new destination, Celebration Key, has been well-received, with expectations to host 2.8 million guests next year. This success highlights Carnival’s strategic expansion and appeal to travelers.
Booking Trends
Booking trends are on an upward trajectory, with nearly half of 2026 already booked at higher prices. Additionally, 2027 bookings are off to an unprecedented start, indicating sustained demand and pricing power.
High Net Interest Expense
Despite the positive financial performance, the company faced a nearly 600% increase in net interest expenses compared to 2019, which has impacted overall financial results.
Headwinds for 2026
Looking ahead, 2026 is expected to face challenges, including a 50 basis point impact on yields from a new loyalty program and up to a 100 basis point impact from increased dry dock expenses.
Operational Costs
Increased operating expenses for new destinations are anticipated to affect year-over-year cost comparisons by about 0.5 points, presenting a potential challenge to maintaining cost efficiency.
Forward-Looking Guidance
Carnival Corporation’s forward-looking guidance remains optimistic, with record revenues, yields, and customer deposits reported. The company raised its full-year guidance for the third time in 2025, reflecting confidence in continued strong performance. Additionally, a reduction in leverage positions the company closer to investment-grade metrics, enabling potential future capital returns to shareholders.
In conclusion, Carnival Corporation & plc’s earnings call highlighted a strong financial performance with record net income and positive booking trends. While challenges such as rising interest expenses and operational costs loom, the overall sentiment remains positive, supported by strategic initiatives and robust forward-looking guidance.