Carnival stock jumped about 9% on Tuesday.
An uncertain economy and geopolitical tensions did not stop Carnival (NYSE:CCL) from cruising to a record quarter.
The world’s largest cruise line posted revenue of $6.3 billion, a record for the second quarter. That was about 10% higher than the same quarter a year ago and topped estimates of $6.2 billion.
The company generated net income of $565 million, or 42 cents per share, up from about $90 million in Q2 of 2024.
Adjusted net income was $470 million, or 35 cents per share, which beat the company’s own March guidance by $185 million. It also was better than analysts’ estimates of 24 cents per share.
Carnival’s stock price soared more than 9% on Tuesday, trading at over $26 per share.
“Our amazing team delivered yet another phenomenal quarter, more than tripling adjusted net income driven by record net yields and strong close-in demand. We also remain on track for a strong 4 percent net yield growth in the second half, consistent with what we forecasted back in December which was before the complex macroeconomic and geopolitical backdrop we have all experienced in the last few months,” Carnival CEO Josh Weinstein said.
SEA change at Carnival
In the second quarter, Carnival had record net yields, which were 6.4% higher than they were in the same quarter a year ago. The net yield is a key metric for Carnival as it measures the total revenue from passengers, minus the costs to produce those passengers. That is then divided by a metric called available passenger cruise days, which is basically the total capacity of the ships.
The net yields not only set a record but exceeded previous guidance by 200 basis points.
The higher net yields were due to higher ticket prices and more onboard spending. Overall, Carnival generated $4.1 billion in passenger tickets, up 9%, and $2.2 billion in onboard spending, up 10%. Also, lower fuel prices helped keep costs in check.
Overall, Carnival had 25.3 billion passenger cruise days in the quarter, up from 24.3 billion in the same quarter a year ago, and carried 3.4 billion passengers, up from 3.3 billion.
In 2023, Carnival rolled out its three-year SEA Change initiative, which set targets for sustainability, EBITDA, and adjusted return on invested capital (ROIC). In Q2, it met the SEA Change targets some 18 months ahead of schedule.
“On top of this, thanks to our consistent track record of significant outperformance, we have already exceeded our 2026 SEA Change financial targets a full 18 months early, increasing adjusted EBITDA per ALBD by 52 percent and more than doubling adjusted ROIC to over 12.5 percent in less than two years. We also met our third 2026 SEA Change commitment to cut carbon intensity by 20 percent from 2019 levels. That’s a win for the planet and our bottom line,” Weinstein said.
Raising its guidance
The strong performance in Q2 allowed Carnival to raise its guidance for the rest of fiscal 2025.
The cruise line now expects net yields to be about 5% higher this year, which is 0.3 percentage points above the March guidance.
Further, it is targeting adjusted cruise costs excluding fuel per available lower berth days (ALBD) to increase around 3.6%, which is lower than the previous guidance of 3.8%.
Adjusted net income has been raised by about $200 million to $2.69 billion, which would be up some 40% compared to 2024. And finally, Carnival is calling for adjusted EBITDA of approximately $6.9 billion, up over 10 percent compared to 2024 and better than $6.7 billion March guidance.
Further, the company’s advanced bookings for the rest of 2025 looks good, with occupancy sitting at the second highest level on record for the company. On top of that, pricing is at historical highs. In addition, bookings for 2026 are trending on par with 2025 record booking levels at historically high prices.
Based on this guidance, its bookings, and its low valuation, trading at 15 times earnings, it looks like Carnival stock has some smooth sailing on the horizon. Of course, increased global tensions or an unexpected shock to the economy could impact that – and are obviously things to watch out for.
