Carnival (CCL) Down 9.7% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Carnival (CCL). Shares have lost about 9.7% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Carnival due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Carnival Corporation before we dive into how investors and analysts have reacted as of late.

Carnival Q2 Earnings & Revenues Beat Estimates, Both Increase Y/Y

Carnival reported better-than-expected second-quarter fiscal 2026 (ended May 31) results, with both adjusted earnings and revenues surpassing the Zacks Consensus Estimate. The top and bottom lines also increased on a year-over-year basis.

Carnival posted its twelfth consecutive quarter of record net yields and exceeded the March guidance by $100 million, driven by strong commercial execution and improved cost efficiency despite nearly 30% higher fuel costs. Management noted that recent booking trends are beginning to improve, indicating a gradual easing of geopolitical headwinds and reinforcing confidence in demand, pricing and the company's long-term earnings potential.

CCL’s Q2 Earnings & Revenues

In the quarter under review, the company reported adjusted earnings per share (EPS) of 41 cents, beating the Zacks Consensus Estimate of 35 cents. In the year-ago quarter, CCL posted an adjusted EPS of 35 cents.

Revenues in the quarter totaled $6.66 billion, beating the consensus mark of $6.64 billion. The metric also increased 5.3% year over year.

During the quarter, passenger ticket revenues amounted to $4.27 billion, up from $4.10 billion reported in the prior-year quarter. Our estimate for passenger ticket revenues was also pegged at $4.23 billion.

Onboard and other revenues increased to $2.39 billion from $2.22 billion reported in the year-ago quarter. Our estimate for Onboard and other revenues was pegged at $2.38 billion.

Carnival’s Financials

Adjusted net income in the quarter amounted to $569 million compared with $470 million reported in the prior-year quarter. Adjusted EBITDA totaled $1.58 billion, up from $1.51 billion reported in the prior-year quarter.

CCL’s Balance Sheet

As of May 31, 2026, cash and cash equivalents were $2.24 billion compared with $1.93 billion as of Nov. 30, 2025. Total debt (current and long-term) as of May 31, 2026, was $24.89 billion compared with $26.64 billion as of Nov. 30, 2025.

Booking Update of Carnival

The company delivered another exceptionally strong booking performance, with its booked position for the second half of 2026 running ahead of last year at historically high prices on a constant-currency basis. This strength was achieved despite more than a full quarter of heightened geopolitical volatility that primarily affected booking trends for European deployments, particularly in the Mediterranean region. Management maintained pricing discipline by leveraging its occupancy advantage, supporting continued yield strength.

With 93% of 2026 capacity already booked and less inventory remaining for sale than at the same point last year, Carnival is well positioned to achieve record net yields in the back half of 2026. Demand for 2027 and beyond also remains robust, with booking volumes and pricing for future sailings running ahead of prior-year levels since March, including a significant increase in bookings for European itineraries.

The company's booking curve remains the furthest out on record, underscoring the strength of its portfolio of cruise brands and sustained demand generation efforts. Continued demand momentum was also reflected in higher fiscal second-quarter onboard revenues, increased pre-cruise onboard sales and strong customer engagement, providing enhanced revenue visibility.

Customer deposits reached an all-time high of $9.0 billion, surpassing the prior year's record by more than $450 million despite flat capacity growth over the next 12 months. The record deposit balance highlights the continued strength in consumer demand and further reinforces Carnival's strong cash flow profile.

CCL’s Q3 & FY26 Outlook

For third-quarter fiscal 2026, the company expects adjusted EBITDA to be approximately $2.88 billion. It expects fiscal third-quarter adjusted net income to be nearly $1.86 billion. The company expects fiscal third-quarter adjusted EPS to be $1.35.

For fiscal 2026, CCL now expects adjusted EBITDA of approximately $7.11 billion, down from its prior estimate of $7.19 billion. Adjusted net income is projected to be nearly $3.07 billion compared with the earlier expectation of $3.1 billion. Accordingly, adjusted EPS for the year is anticipated to be $2.22, revised up from the previous outlook of $2.21.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

Currently, Carnival has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a score of A on the value side, putting it in the top 20% for value investors.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Carnival has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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