Carnival Corporation announced an impressive financial performance for the third quarter on Tuesday. High demand for cruises and lower operating costs helped balance out the rising fuel expenses.
The company reported a net income of $1.9 billion for the quarter, with adjusted net income at $2.0 billion. Revenue hit a record $8.4 billion and adjusted EBITDA reached $3.0 billion.
These results happened even with a $131 million loss due to increased fuel prices and changes in currency rates. Carnival stated that diluted earnings per share were $1.40, while adjusted earnings per share were $1.43.
“We achieved record results again, driven by growing demand and strong cost management, which exceeded our expectations,” said CEO Josh Weinstein.
Signs of strong demand continue as the company looks towards 2027. Carnival noted that both occupancy and pricing for next year are at all-time highs, with booking volumes this quarter exceeding last year’s, despite limited capacity growth.
Customer deposits reached a record $7.6 billion in the third quarter, rising about $500 million from the previous high. Carnival also reported that 2028 bookings are outpacing last year at better occupancy rates and prices.
However, rising energy costs remain a significant challenge for the company. Gross margin yields dropped 1.3% from the previous year, mainly due to fuel costs, while cruise costs per available lower berth day rose by 4.2%.
On a positive note, net yields in constant currency increased by 2.4%, which is over one percentage point above Carnival’s June forecast. Fuel consumption per available lower berth day improved by 3.8%.
The company also noted ongoing costs from the conflict in the Middle East, pointing to increased logistics expenses in their annual cost forecast.
Carnival now anticipates operational improvements to boost adjusted net income by over $150 million compared to their June estimate, which should offset an expected $150 million loss due to rising fuel costs. They forecast full-year adjusted net income at around $3.08 billion and adjusted EBITDA of about $7.14 billion.
For the fourth quarter, Carnival expects net yields in constant currency to rise roughly 1.7% from last year’s record levels.
The strong performance is positively impacting Carnival’s balance sheet. The company has repurchased about $1.2 billion in shares this year, including nearly $800 million since the start of the third quarter, and paid $618 million in dividends.
During the quarter, Carnival also redeemed $500 million of 7% notes. S&P upgraded the company’s credit rating to investment grade, marking it as the second agency to do so and leaving Carnival with no remaining secured debt.
Following these results, shares rose as investors reacted positively to the earnings beat and the strong bookings for 2027.