Carnival plc - ADR

Record Q2 performance; strong profitability despite shocks (good + surprising): - Carnival delivered a record Q2 with net income of $569M, >20% vs. prior year, and >March guidance by ~$100M (+$0.07/share). - EBITDA, yields, revenues, customer deposits all hit records; deposits reached an all-time high of $9B. - Despite extreme geopolitical volatility, historically weak consumer sentiment, and unusually high fuel prices, the company still outperformed—showing operational resilience.

Yields outperformed, but full-year outlook moderated due to the Middle East impact (bad + risk): - Company highlighted unexpectedly persistent geopolitical disruption through most of Q2 (including knock-ons like air travel/fleet disruption). - As a result, Q3+ back half guidance includes moderation, primarily concentrated in European deployments (especially Med) and also driven by elevated airfares / reduced international flight capacity for North American guests. - However, management insists this is “transitory” and that the underlying demand trajectory is intact.

Full-year June guidance: EPS $2.22; yield growth assumptions ~2.25% normalized (forecast): - FY EPS (June guidance): $2.22, +$0.01 vs prior guidance (mainly due to EPS accretion from share repurchases). - Normalized yield growth assumption: ~2.25% (management framed as normalized with adjustments, including loyalty program accounting impacts in Q4 and prior redeployment context). - Management attributed the ~100 bps yield revision vs earlier guidance to geopolitical disruption, but offset it with intensified cost actions.