Carnival Stock Surges 11% After Cruise Giant Posts Record Profit and Raises Outlook Despite Fuel Spike

MIAMI — Shares of Carnival Corp. surged more than 11% on Tuesday after the world's largest cruise operator reported record third-quarter revenue and profit, beat Wall Street's expectations and raised its full-year earnings outlook despite a sharp increase in fuel costs.

Carnival stock was trading at $24.70 as of 10:03 a.m. EDT, up $2.56, or 11.56%, from Monday's close of $22.14. The rally lifted the broader cruise sector, with shares of Royal Caribbean Group and Norwegian Cruise Line Holdings also rising sharply.

Record quarter

For the three months ended Aug. 31, Carnival reported all-time high net income of $1.9 billion and adjusted net income of $2.0 billion. Revenue rose 3.5% from a year earlier to a record $8.44 billion.

Adjusted earnings came to $1.43 per share, flat with a year ago but well ahead of analysts' average estimate of $1.35. Revenue also topped Wall Street's forecast of about $8.39 billion. It was the company's seventh consecutive quarterly earnings beat.

Adjusted EBITDA matched last year's record at about $3.0 billion, $110 million ahead of the company's own guidance.

"We delivered another quarter of top and bottom-line records, with accelerating demand and even stronger cost discipline driving results ahead of our expectations," CEO Josh Weinstein said in a statement.

Net yields, a key industry measure of revenue per passenger per day, rose 2.4% in constant currency, more than a percentage point better than the company had expected. Adjusted cruise costs excluding fuel per available lower berth day rose 1.8% in constant currency, a point better than guidance.

The company achieved the results despite absorbing about $131 million in unfavorable impacts from fuel prices and currency exchange rates.

Outlook raised

Carnival raised its full-year 2026 outlook, projecting adjusted net income of about $3.08 billion, an operational improvement of more than $150 million compared with its June guidance. The company said that improvement came despite a $150 million hit from higher fuel prices.

The company now expects full-year adjusted earnings of about $2.24 per share, slightly above its previous guidance, and adjusted EBITDA of about $7.14 billion.

Carnival expects full-year net yields to rise about 2.3% in constant currency, half a percentage point better than its June forecast. For the fourth quarter, it projects net yields up about 1.7%.

The results were a key test for the company after it warned in June that the conflict in the Middle East and rising oil prices were weighing on its business. Heading into the report, investors were focused on whether Carnival would be forced to cut its guidance because of higher fuel costs.

Strong bookings for 2027

Carnival said demand for cruises remains strong. Customer deposits reached a third-quarter record of $7.6 billion, up nearly 7% from the prior-year record, even though the company's capacity was essentially flat.

The company said both booked occupancy and pricing for 2027 sailings are at record levels.

"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," Weinstein said.

Carnival has deliberately limited its capacity growth in recent years, adding few new ships while focusing on raising prices and increasing onboard spending. The company has also invested in private destinations, including Celebration Key in the Bahamas and RelaxAway at Half Moon Cay, to boost its appeal to travelers.

Returning cash to shareholders

Carnival has been stepping up returns to shareholders as its cash flow strengthens after years of heavy borrowing during the COVID-19 pandemic, when cruise operations were shut down.

The company said it has repurchased about $1.2 billion of its shares so far this year, including nearly $800 million since the beginning of the third quarter. It also pays a dividend.

Chief Financial Officer David Bernstein said the company used cash on hand during the quarter to redeem $500 million of notes carrying a 7% coupon, among its highest-cost debt.

"Our world-class cruise lines and destinations, exceptional guest experiences delivered by the best team in travel and leisure, and enhanced demand-generation against intentionally measured capacity growth position us to continue driving higher returns," Weinstein said. "At the same time, we are putting our increasingly durable cash flow to work, reinvesting in our business while returning more capital to shareholders."

Rebound from yearly lows

Tuesday's rally offered relief for investors after a difficult year for the stock. Before the report, Carnival shares had fallen more than 25% in 2026 and were trading just above their 52-week low of $21.52.

The decline reflected concerns about fuel costs, which ran nearly 30% higher than a year earlier in the second quarter, along with softer demand in Europe tied to the conflict in the Middle East. Some analysts had cut their price targets ahead of the report. TD Cowen lowered its target to $32 from $34 last week while keeping a buy rating, citing higher fuel costs.

Cruise stocks rally

Carnival's results lifted other cruise stocks. Royal Caribbean shares rose about 7%, while Norwegian Cruise Line Holdings gained about 5%, as investors bet that strong demand across the industry could help offset higher fuel costs.

Energy stocks, meanwhile, fell as oil prices eased, a shift that could further ease cost pressures on cruise operators.

Carnival was scheduled to hold a conference call with analysts at 10 a.m. EDT Tuesday to discuss the results.

Investors will watch for further updates on fuel costs, European demand and the company's progress toward its financial targets, including debt reduction and shareholder returns, as it heads into 2027 with record bookings.