Carnival Corp. Carnival (CCL) stock fell Tuesday after the cruise operator reported second-quarter results that topped earnings expectations but missed on revenue. The company also issued third-quarter guidance below Wall Street estimates, offsetting a slight increase to its full-year profit outlook.

Second-Quarter Earnings Beat, Revenue Misses

Carnival reported second-quarter revenue of $6.663 billion, below analysts' estimate of $6.692 billion. Adjusted earnings came in at 41 cents per share, topping the consensus estimate of 35 cents. GAAP diluted earnings were 39 cents per share.

Revenue increased 5.3% from $6.328 billion a year earlier. Net income attributable to Carnival declined to $537 million from $565 million. Adjusted net income climbed more than 20% to a record $569 million, while adjusted EBITDA reached a record $1.582 billion.

Demand Remains Strong Despite Europe Headwinds

Passenger ticket revenue increased to $4.273 billion from $4.104 billion, while onboard and other revenue rose to $2.390 billion from $2.224 billion.

Gross margin yields fell 3.9% because of higher fuel prices. However, record net yields in constant currency increased 2.2%.

Fuel consumption per available lower berth day (ALBD) improved 5.6%, helping offset a nearly 30% increase in fuel prices.

ALBDs rose to 24.7 million from 24.2 million, while passenger cruise days increased to 25.7 million from 25.3 million. Occupancy remained at 104%, and passengers carried held steady at 3.4 million.

Carnival said it is 93% booked for 2026, with less inventory available than at the same point last year.

Cost Controls Offset Yield Pressure

During the earnings call, management said volatility in the Middle East reduced yield growth by about one percentage point compared with prior guidance, creating an operational impact of roughly 14 cents per share that was concentrated in Europe.

The company said it chose to accept lower occupancy in Europe rather than discount fares to fill ships.

Management added that the second-quarter earnings beat was driven largely by cost discipline. Cruise costs excluding fuel per ALBD came in about 250 basis points better than guidance, and the company expects those savings to be structural.

Looking ahead, Carnival said 2027 European bookings are up in the mid-teens at higher prices, while overall bookings are at historical highs for both occupancy and pricing.

Carnival Outlook And Balance Sheet

Customer deposits reached a record $9 billion, more than $450 million above the previous high. Operating cash flow totaled $2.629 billion, while capital expenditures were $875 million.

As of May 31, Carnival held $2.243 billion in cash and cash equivalents and carried $24.889 billion in debt. Net debt to adjusted EBITDA stood at 3.1 times.

For fiscal 2026, Carnival raised its adjusted EPS forecast to about $2.22 from $2.21. Analysts had expected $2.25. The company also forecast adjusted net income of about $3.07 billion and adjusted EBITDA of about $7.11 billion.

For the third quarter, Carnival expects adjusted EPS of about $1.35, below the Wall Street estimate of $1.42. The company said its full-year outlook reflects elevated logistics costs related to disruptions from the Middle East conflict.

Carnival Stock Falls

CCL Price Action: Carnival shares were down 5.45% at $28.54 at the time of publication on Tuesday, according to market data.