Yahoo Financeยท2025-09-29 21:03Core Insights - Carnival Cruise Lines experienced significant stock volatility, initially rising by 6.1% before declining by 4.3% on the same day following its third-quarter earnings report [1][2] Financial Performance - In the third quarter, Carnival reported revenue of $8.12 billion, an increase of 3.3%, and adjusted non-GAAP earnings per share of $1.43, up 12.3%, both exceeding market expectations [3] - The company also improved several key metrics, including higher net yields and lower costs per available lower berth day, alongside an increase in adjusted EBITDA [3] Future Outlook - Carnival raised its full-year 2025 guidance across all financial metrics for the third consecutive quarter, contributing to initial stock appreciation [4][7] - However, the stock's decline was attributed to the announcement of plans to redeem all outstanding convertible notes totaling approximately $1.31 billion, which may involve equity issuance that could dilute current shareholders [4][5] Debt and Valuation - Carnival's market capitalization stands at $39.4 billion, with net debt around $25.4 billion, resulting in an enterprise value of approximately $64.8 billion and an EV/EBITDA ratio of 9.1, indicating a moderate valuation given its debt levels [8] - Management aims to reduce the debt-to-EBITDA ratio below 3, currently at 3.57, with the redemption of convertible notes expected to assist in this goal [9]