Carnival shares drop despite earnings beat on weak guidance

Investing.com -- Carnival Corporation (NYSE: CCL) reported second quarter results that exceeded analyst expectations, but shares plunged over 9% premarket as investors focused on the impact of geopolitical headwinds on the company's outlook.

The cruise operator posted adjusted earnings per share of $0.41, beating the analyst estimate of $0.33 by $0.08. Revenue reached a record $6.7 billion, slightly above the consensus estimate of $6.68 billion. Adjusted net income of $569 million rose over 20% compared to the prior year, despite facing nearly 30% higher fuel costs and a $73 million unfavorable impact from fuel prices and currency rates.

CEO Josh Weinstein said, "We achieved another quarter of record results, marking our twelfth consecutive quarter of record net yields and delivering over 20% more to the bottom line, overcoming extreme geopolitical headwinds and nearly 30% higher fuel costs."

For the third quarter 2026, Carnival expects adjusted EPS of approximately $1.35, below the consensus estimate of $1.42 and adjusted EBITDA of approximately $2.88 billion. Full-year 2026 adjusted EPS is projected at approximately $2.22, just below the $2.23 expected, with adjusted EBITDA of approximately $7.11 billion.

The company expects full-year net yields to increase approximately 3.2%, or 1.75% in constant currency.

CCL noted that extreme geopolitical volatility, particularly the prolonged conflict in the Middle East, impacted booking trends for European deployments in the Mediterranean region. However, Weinstein indicated recent booking trends suggest a reversal of these headwinds.

Customer deposits reached an all-time high of $9.0 billion, up over $450 million from the prior year record. The company has repurchased over $450 million of stock under its current buyback program and distributed $414 million in dividends year to date. Carnival's net debt to adjusted EBITDA ratio improved to 3.1x, down more than half a point from one year ago.

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