Carnival overshoots Q3 earnings forecasts, lifts guidance

Adjusted net income was $1.8b, or $1.27 per share, ahead of Wall Street's $1.16 consensus and higher than June guidance, driven by outperformance in yield and cost. US GAAP net income was $1.7b, or $1.26/share, an increase of $662m compared to 2023.

Net yield up 8.7%

Net yield (contant currency) rose 8.7%, while occupancy reached 112% with a 5-point increase from the European brands, according to CFO David Bernstein.

Net per diems (constant currency) were up nearly 6% over 2023 with both ticket prices and onboard spending up mid-single digits. Cruise costs per available lower berth day increased 3.4% year over year.

Adjusted cruise costs excluding fuel per ALBD (constant currency) decreased compared to 2023 and were significantly better than June guidance driven by cost saving opportunities, accelerated easing of inflationary pressures, benefits from one-time items and the timing of expenses between the quarters.

Revenues hit an all-time high of $7.89b, up $1b from a year ago.

Q3 customer deposits record

Total customer deposits reached a Q3 record $6.8b, surpassing the previous Q3 high of $6.3b as of Aug. 31, 2023, despite lower capacity growth.

Guidance goes up

As a result of strong demand and cost-saving opportunities, Carnival raised its full year 2024 adjusted EBITDA guidance to approximately $6b, up over 40% compared to 2023 and better than June guidance by nearly $200m.

The full-year earnings per share estimate goes to $1.33, above Wall Street's $1.21 expectation. Q4 EPS is estimated at approximately 5 cents per share, 2 cents under the Wall Street consensus.

'We delivered a phenomenal third quarter, breaking operational records and outperforming across the board. Our strong improvements were led by high-margin, same-ship yield growth, driving a 26% improvement in unit operating income, the highest level we have reached in 15 years,' Weinstein said.

'We are poised to deliver record operating performance for full year 2024, with adjusted EBITDA now expected to cross $6b and adjusted return on invested capital to be approximately 10.5%,' he continued. 'Strong demand enabled us to increase our full year yield guidance for the third time this year and we improved our cost guidance driving more revenue to the bottom line.'

Weinstein added Carnival's 'enhanced commercial execution drives demand well in excess of our capacity growth, leaving us well positioned with an even stronger base of business for 2025, a record start to 2026 and firmly on the path toward our SEA Change targets.'

Bookings

With nearly half of 2025 booked and less inventory remaining for sale than the prior year, Carnival is leveraging strong demand to achieve record ticket pricing (constant currency), Weinstein said.

All the company's brands are ahead on price for 2025 sailings.

'Likewise, 2026 is off to an unprecedented start, achieving record booking volumes in the last three months,' Weinstein noted.

During the third quarter, booking volumes remained robust for 2025 sailings at higher prices (in constant currency) compared to the prior year.

The cumulative advanced booked position for full year 2025 is above the previous 2024 record with prices (constant currency) ahead of prior year.