Carnival Corporation & plc

Q3 performance: strong outperformance across revenue, costs, and fuel efficiency (all-time highs) - Management reported record revenues and yields and reported Q3 net income above guidance by >$100m (≈$0.08/share). - Yield/Revenue upside: yields up ~2.5% YoY, and ~1.2 percentage points above June guidance, driven by strong close-in demand and robust onboard spending. - Cost upside (ex-fuel): cruise costs excluding fuel per ALBD up only 1.8% YoY, 100 bps better than guidance—and importantly, most of those savings flow through to full-year guidance. - Fuel efficiency surprise/benefit: fuel consumption nearly 4% lower YoY, on top of already strong recent improvements; this helped offset volatility in fuel prices.

Updated 2026 outlook: EPS raised modestly; operational improvements are expected to beat June despite fuel headwind - Updated full-year EPS guidance: $2.24, up $0.02 vs prior guidance (September guidance). - They expect > $150m of net income improvement vs June guidance, combining: - Higher yields (guidance yield growth ~2.3%, ~0.5pt better than June), - Lower-than-guided unit cost pressure (ex-fuel cruise costs ~2.2% YoY, better than June), - Better fuel consumption contributing to mitigation of ~$150m impact from increased fuel prices. - Q4 expectations: yields ~1.7% YoY (≈0.75pt above implied June); normalized yield discussion adjusts for loyalty accounting effects. - A key driver: 26% reduction in fuel consumption per ALBD since 2019; management cites this as generating ~$750m fuel savings at guidance fuel prices (mitigating headwind).

2027 demand and pricing: positioned for strong growth with capacity still tightly managed - 2027 capacity growth: only ~0.5% vs 2026 (intentionally measured). - Management claims occupancy and pricing at record levels; they say booking momentum is improving despite Q1 2027 carrying over earlier spring disruption. - Stated view on booking disruption: it was a longer “burn” this spring, impacting long-haul/exotic routes, but not insurmountable; they’re seeing improvement over recent months. - Customer deposits: ~$7.6b deposits in Q3, up ~7% YoY despite flat capacity growth—used as evidence of demand strength. - Europe mix shift: for the first time, Europe ties the Caribbean as the largest deployment region in 2027 (each ~34% of mix), driven by Northern Europe demand/seasonality.