Carnival cuts profit outlook as a jump in fuel costs offsets record cruise demand

By Tomi Kilgore

Stock falls as cruise operator sees fuel costs in the current quarter surging more than 40% from the prior one

Carnival's stock drops as rising fuel prices hurt profit outlook.

Carnival said Friday that demand for cruises is stronger than its ever been, with people already booking trips two years from now, but the company still cuts its profit outlook as fuel costs surge.

The company said that while operational improvements it has made in the latest quarter provided a $150 million boost to full-year income guidance, that falls well short of the "recent changes in fuel price of more than $500 million."

For the current quarter, Carnival expects fuel costs per metric ton consumed of $795, which is 42.2% more than the $559 it cost in the fiscal quarter through Feb. 28.

The impact of fuel prices led the company to project adjusted earnings per share of 34 cents for its second quarter, which is below the average analyst EPS compiled by FactSet of 37 cents. For the full fiscal year, the company cut its adjusted EPS guidance to approximately $2.21 from $2.48.

The stock was off 4.9% in recent trading. It has tumbled 23.8% so far this month, hurt by the start of the Iran war, to put it on track to suffer the biggest monthly decline since it shed 25.7% in September 2022.

The selloff spread to Carnival's peers, as shares of Royal Caribbean Group (RCL) slid 4% and Norwegian Line Holdings shares (NCLH) shed 5.2%.

Also read: 'Cruising used to feel special.' Cruise lines were struggling even before the Iran conflict.

The profit and fuel-price forecast overshadowed what was otherwise an upbeat outlook for cruise demand.

Deposits from customers reached a first-quarter record of $8 billion, beating the prior year's record by 10%, CEO Weinstein said.

"We delivered an incredibly strong start to the year, achieving our highest level of bookings ever on strong demand that extended well into 2028 sailings," Weinstein said.

For net yields, a key metric the cruise industry uses to measure the profitability of revenue, the company lifted its full-year guidance to 4.1% from 3.7%.

For the latest quarter to Feb. 28, total revenue rose 6.1% to $6.17 billion, to top the FactSet consensus of $6.14 billion. Passenger-ticker revenue grew 5% to $4.02 billion, while onboard spending and other revenue was up 8.3% to $2.14 billion.

Adjusted EPS, which excludes nonrecurring items, rose to 20 cents from 13 cents, and beat the FactSet consensus of 18 cents.

Carnival's stock has dropped 21.3% in 2026 but was still up 15.7% over the past 12 months. In comparison, the S&P 500 index SPX has slipped 6.3% this year but has gained 12.7% the past year.

-Tomi Kilgore

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03-27-26 1153ET