To The Moon

$Carnival(CCL)$ is expected to release their earnings report on September 29, 2025, before the market open.

Adjusted Earnings Per Share (EPS) (Consensus): Approximately $1.31 (up from $1.27 in Q3 2024, a growth of about 3.2%). Note: The company's own June guidance was $1.30.

Revenue (Consensus): Approximately $8.05 - $8.1 billion (up roughly 2.0% - 2.2% year-over-year).

Carnival (CCL) Fiscal Q2 2025 Earnings Summary

Carnival Corporation delivered an exceptionally strong second quarter, significantly outperforming its prior guidance and demonstrating robust demand and improved operational efficiency.

Key Financial Highlights:

Adjusted Net Income (Profit): More than tripled year-over-year to $470 million, or $0.35 Adjusted EPS, beating the company's March guidance by $185 million.

Revenue: Reached a record $6.3 billion, up nearly 10% compared to the prior year.

Net Yields (in Constant Currency): Grew by 6.4% year-over-year, significantly surpassing guidance due to higher ticket prices and strong onboard spending. This marks the eighth consecutive quarter of record revenues on record yields.

Adjusted EBITDA: Hit a record $1.5 billion, a 26% increase year-over-year, resulting in the highest quarterly EBITDA margins in nearly two decades.

Customer Deposits: Reached an all-time high of $8.5 billion, reflecting strong future booking momentum and pricing power.

Debt Management: The company continued to aggressively manage its debt, achieving a net debt to Adjusted EBITDA ratio of 3.7x (down from 4.1x in Q1 2025), and refinancing nearly $7 billion of debt at favorable rates.

Strategic Accomplishments:

The company exceeded its 2026 "SEA Change" financial targets (Adjusted EBITDA per ALBD and Adjusted ROIC) a full 18 months early, highlighting the structural improvement in its business model.

Lesson Learnt from the Guidance Given

The primary lesson learned from Carnival's updated full-year guidance is the sustained pricing power and resilient demand for cruise vacations, enabling accelerated financial recovery and deleveraging.

Key Takeaways from the Updated Guidance:

Confidence in Sustained Demand and Pricing Power:

Carnival raised its full-year 2025 Adjusted Net Income guidance by $200 million to approximately $2.7 billion and increased its full-year net yield growth guidance to 5.0%.

Lesson: The outperformance in Q2, driven by strong close-in demand and pricing gains, is not viewed as a one-off event. Management is confident that a combination of operational execution (like enhanced onboard spending) and a perception of cruising as a high-value vacation will allow them to sustain price increases for the rest of the year and into 2026.

Structural Business Improvement Trumps Macro Headwinds:

The guidance raise came despite an acknowledgment of a complex macroeconomic and geopolitical backdrop. The company noted that virtually all 2025 EBITDA growth is expected to come from same-store revenue gains (like higher prices and onboard spending), with only marginal capacity growth.

Lesson: The company's focus on commercial execution (yield management, marketing, and new destination launches like Celebration Key) is proving more impactful than external economic pressures. The structural improvements in margins and return on invested capital (ROIC) are foundational and long-lasting.

Deleveraging is a Top Financial Priority and Accelerating:

The company's actions—such as prepaying and refinancing debt to reduce interest expense and improving its net-debt-to-EBITDA ratio—signal that reducing its debt load is a critical step in the journey back to an investment-grade rating.

Lesson: Strong operational cash flow is being actively deployed to fix the balance sheet inherited from the pandemic. This focus on financial health is a prerequisite for potentially restarting significant shareholder returns (like dividends or buybacks) in the future.

Q3 2025 Earnings Analysis (Fiscal Quarter Ended August 2025)

The general consensus from analysts points to a continuation of the post-pandemic recovery and strong consumer demand for cruises, leading to growth in key financial metrics.

CCL has a strong history of beating consensus EPS estimates in recent quarters, and some models (like the Zacks Earnings ESP) suggest a high probability of an earnings beat for Q3 2025 as well, given recent upward revisions to estimates.

Key Performance Drivers and Headwinds:

Positive Drivers:

Sustained Demand and Pricing: The third fiscal quarter is the peak summer season. Analysts expect strong pricing momentum, record customer deposits, and high occupancy rates to drive Ticket Revenue and Net Yields (revenue per available lower berth day).

Onboard Spending: Continued strong growth in guest spending on food, beverages, excursions, and retail is expected to provide a significant boost to Onboard and Other Revenue.

Strategic Initiatives: The launch and operation of key destinations, such as "Celebration Key," are expected to contribute to both revenue generation and enhanced customer experience.

Headwinds/Cost Pressures:

Increased Operating Costs: Management previously flagged an expected increase in Adjusted Cruise Costs Excluding Fuel per ALBD (Available Lower Berth Day) by around 7% year-over-year. This is driven by start-up costs for new destinations (like Celebration Key), higher advertising expenses, and the impact of slightly lower capacity levels in the quarter.

Macroeconomic Factors: General inflationary pressures and global geopolitical risks are ongoing concerns that could impact consumer sentiment or operational costs.

Key Metrics Investors Should Watch

Investors should look beyond the headline EPS and Revenue numbers to these critical operational metrics, as they indicate the underlying health and future profitability of the business:

Carnival (CCL) Price Target

Based on 21 analysts from Tiger Brokers offering 12 month price targets for Carnival in the last 3 months. The average price target is $33.50 with a high forecast of $43.00 and a low forecast of $24.00. The average price target represents a 9.92% change from the last price of $30.48.

Short-Term Trading Opportunities Post-Earnings

Trading around earnings is high-risk, but opportunities may arise based on how the results compare to the already high expectations:

Important Note for Short-Term Trading: CCL stock is highly sensitive to the guidance on Net Yields and the Full-Year EPS Forecast. A surprise—positive or negative—in these forward-looking metrics is likely to be the primary catalyst for a significant post-earnings move. Given the recent upward trajectory, a "sell the news" reaction is possible even on a slight beat if the guidance is not substantially raised.

Technical Analysis - Exponential Moving Average (EMA)

It looked like CCL is trading below the 26-EMA and touching the 50-EMA with positive momentum looking to weaken, but there is expectation that CCL would display continued strength in its earnings which might be driven by robust travel demand.

If that happen, we might see a strong price rally to the upside short-term, but do watch out for the "sell the news" reaction because even if CCL could provide an earnings beat, if the guidance is not substantially raised.

Summary

Carnival Corporation's (CCL) upcoming fiscal Q3 2025 earnings analysis suggests continued strength, driven by robust travel demand.

Key Analyst Expectations (Consensus):

Adjusted EPS: Around $1.31, up from the year-ago quarter.

Revenue: Projected at approximately $8.09 billion, a year-over-year increase.

Net Yields: Expected to grow, reflecting strong pricing power.

Drivers of Expected Growth:

Strong Booking Momentum: Advance booking volumes and pricing for 2025 are at historically high levels, with occupancy rates also expected to remain strong (around 112%).

Onboard Spending: Continued growth is anticipated in high-margin onboard revenue streams (e.g., food, retail, excursions).

Optimistic Guidance: The company previously provided strong Q3 guidance and raised its full-year outlook, reflecting management's confidence.

Challenges and Focus Areas:

Cost Pressures: Analysts anticipate a rise in adjusted cruise costs per available lower berth day (ALBD), excluding fuel, due to new destination operating expenses (like "Celebration Key") and increased advertising.

Fuel Costs: Volatility in international oil prices remains a factor that could impact margins.

Overall, the market anticipates another quarter of solid performance, validating Carnival's post-pandemic recovery and operational efficiency improvements.

Appreciate if you could share your thoughts in the comment section whether you think CCL earnings would continue its strength which is driven by robust travel demand.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.