Carnival (CCL) Up 20.6% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Carnival Corporation has reported strong financial results for Q2 fiscal 2025, with adjusted earnings and revenues exceeding estimates, driven by sustained demand and robust onboard revenues [2][5][7]. Financial Performance - Adjusted earnings per share (EPS) for Q2 were 35 cents, surpassing the Zacks Consensus Estimate of 24 cents by 45.8%, and up from 11 cents in the same quarter last year [5]. - Revenues for the quarter reached $6.33 billion, exceeding the consensus mark of $6.21 billion by 2% and reflecting a year-over-year increase of 9.5% [5]. - Adjusted net income for the quarter was $470 million, a significant increase of 250.7% year over year from $134 million, attributed to higher ticket prices and increased onboard spending [7]. - Adjusted EBITDA totaled $1.51 billion, up from $1.2 billion reported in the prior-year quarter [7]. Strategic Initiatives - Carnival has surpassed its 2026 SEA Change financial targets 18 months ahead of schedule, with adjusted EBITDA per ALBD growing 52% and adjusted ROIC increasing more than 12.5% [3]. - The company aims to focus on same-ship, high-margin revenue growth to ensure robust revenue visibility and profitability in 2026 and beyond [4]. Balance Sheet and Liquidity - As of May 31, 2025, cash and cash equivalents were $2.15 billion, up from $1.21 billion as of November 30, 2024, with total liquidity of $5.17 billion [8]. - Total debt as of May 31 was $27.3 billion, slightly down from $27.48 billion as of November 30, 2024 [8]. Booking Trends - Carnival's cumulative advanced booked position for the remainder of 2025 remains strong, with record-high cumulative advance bookings and pricing at historical peaks [10][11]. - Total customer deposits as of May 31 were $8.08 billion, an increase from $7.3 billion reported in the preceding quarter [11]. Future Outlook - For Q3 fiscal 2025, Carnival expects adjusted EBITDA to be approximately $2.87 billion and adjusted net income to be about $1.8 billion, with adjusted EPS projected at nearly $1.30 [12]. - For the full fiscal 2025, the company anticipates adjusted EBITDA to be approximately $6.9 billion, reflecting over 10% growth year over year, and adjusted net income is now expected to be about $2.69 billion [13].