Carnival Corp (NYSE:CCL) shares fell almost 6% on Tuesday after the cruise operator issued a third quarter profit outlook below Wall Street expectations, overshadowing stronger-than-expected second-quarter results and record revenue.
The company reported adjusted earnings of $0.41 per share for the quarter ended May 31, ahead of analysts' estimates of $0.33 per share.
Revenue rose to a record $6.7 billion, slightly above the consensus forecast of $6.68 billion.
Net income attributable to Carnival reached $537 million, while adjusted net income climbed more than 20% year over year to a record $569 million. Adjusted EBITDA also hit a record $1.6 billion.
Carnival said customer deposits reached an all-time high of $9 billion, up more than $450 million from the previous year's record, while bookings for the remainder of 2026 remain ahead of last year at historically high prices.
For the third quarter, Carnival expects adjusted earnings of $1.35 per share, below analysts' expectations of $1.42. The company projected full-year 2026 adjusted earnings of $2.22 per share, also below the consensus $2.23.
Carnival CEO Josh Weinstein said the company delivered its "twelfth consecutive quarter of record net yields" despite "extreme geopolitical headwinds and nearly 30% higher fuel costs."
The company said booking trends for Mediterranean itineraries were affected by the prolonged conflict in the Middle East, prompting it to prioritize pricing over occupancy. Carnival noted that it is 93% booked for 2026, with less inventory remaining for sale than at the same point last year.
Weinstein said recent booking trends indicate the company is beginning to see "a reversal of these headwinds," adding that demand for 2027 and beyond continues to run ahead of prior-year levels.
For 2026, Carnival expects net yields to increase about 3.2% from 2025 levels and adjusted cruise costs excluding fuel per available lower berth day to rise approximately 3.7%. The company said elevated logistics costs linked to disruptions from the Middle East conflict are incorporated into its outlook.