Q1 Earnings and Bookings Set New Records, Outpacing Guidance
Carnival Corporation & plc (CCL) started 2026 on a high note, announcing record first quarter operating results and bookings that outperformed internal guidance. Diluted EPS rose to $0.19 and adjusted EPS to $0.20—up 50% from the prior year—powered by record revenues of $6.17 billion and net income of $258 million. This marked an adjusted EBITDA record at $1.27 billion, underscoring the company’s ability to convert surging demand into bottom-line improvement even as fuel prices posed headwinds.
Gross margin yields grew nearly 10% versus last year, while record net yields in constant currency climbed 2.7%, exceeding guidance by over a full percentage point. Carnival’s total bookings for 2026 were up double digits, and nearly 85% of 2026 inventory is already booked at historically high prices—a testament to outstanding demand and favorable pricing power.
Operational Efficiency and Cash Flow Fuel Share Buyback and Dividends
Operational discipline continues to show. Cruise costs per available lower berth day (ALBD) rose 4.9%, while adjusted costs excluding fuel per ALBD increased just 5.3%, both better than forecast. Importantly, fuel consumption per ALBD decreased by 4.7%, reflecting sustained investments in efficiency.
Momentum is translating into cash: customer deposits now stand at $7.92 billion—a first-quarter record and about 10% above last year. Carnival announced a $2.5 billion share buyback program and plans to return approximately $14 billion to shareholders through 2029, including $800 million in expected dividends this year. Free cash flow is more than strong enough to support these initiatives.
| Key Metrics | Q1 2026 | Q1 2025 | YoY Change |
|---|---|---|---|
| Total Revenues | $6.17B | $5.81B | +6.2% |
| Net Income | $258M | ($78M) | Turnaround |
| Adjusted EBITDA | $1.27B | $1.21B | +5.0% |
| Net Yields (Constant Currency) | $189.86 | $184.95 | +2.7% |
| Adjusted EPS | $0.20 | $0.13 | +53.8% |
| Customer Deposits | $7.92B | $7.25B | +9.3% |
| Occupancy Rate | 103% | 103% | Flat |
PROPEL Plan Sets Course for Continued Growth and Sharper Returns
Carnival’s new long-term strategy, PROPEL (Powering Growth and Returns, Responsibly), aims to drive over 50% adjusted EPS growth by 2029 (vs. 2025), achieve greater than 16% return on invested capital, and distribute more than 40% of operating cash flow—about $14 billion—to shareholders. PROPEL also calls for a 2.75x net debt to adjusted EBITDA ratio and a more than 25% reduction in greenhouse gas emissions rate versus 2019 levels.
This forward-looking plan is supported by strategic investments in fleet renewal and destination expansion, leveraging scale for cost advantages, and accelerating technology adoption to boost both revenue and efficiency.
| PROPEL Key Targets (by 2029) | Goal |
|---|---|
| Adjusted EPS Growth | +50% from 2025 |
| Return on Invested Capital | >16% |
| Shareholder Distributions | $14B+ (40%+ of operating cash flow) |
| Net Debt / Adjusted EBITDA | 2.75x |
| GHG Emissions Rate Reduction | 25%+ vs. 2019 |
Strong Full-Year 2026 Outlook Bodes Well for Shareholders
For 2026, Carnival expects net yields (constant currency) to be up 2.75% from 2025’s record, adjusted costs (excluding fuel per ALBD) up around 3.1%, and operational income about $150 million higher than previous guidance. Adjusted EBITDA is forecast to reach $7.19 billion, with adjusted EPS at $2.21. Capacity growth remains disciplined at just 0.9% year-over-year, while capital expenditures will be carefully managed with $0.6 billion planned for newbuilds and $1.8 billion for fleet enhancements.
Shareholders may want to pay attention to the impact of fuel price swings and currency fluctuations—both key sensitivity drivers in Carnival’s forward outlook.
| 2026 Guidance | Full Year | YoY Change |
|---|---|---|
| Net Yields (constant currency) | +2.75% | Improving |
| Adj. Cruise Costs excl. Fuel per ALBD | +3.1% | Disciplined |
| Adj. EBITDA | $7.19B | N/A |
| Adj. Net Income | $3.07B | N/A |
| Adj. EPS | $2.21 | Strong growth |
| Capacity Growth | +0.9% | Stable |
| Planned CapEx (newbuilds) | $0.6B | N/A |
Record Quarter Reinforces Positive Long-Term Trend
Carnival’s robust Q1 performance, healthy forward bookings, and clear strategic vision through the PROPEL plan signal continued recovery and competitive momentum in the cruise industry. While macro risks like fuel and FX remain, the company’s combination of strong cash flow, disciplined growth, and rising shareholder returns positions CCL attractively for long-term investors to watch—especially as share buybacks and dividend payouts ramp up in the years ahead.
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