Carnival Stock Falls Despite Strong Earnings. It’s a Harsh Reaction.

Carnival beat fiscal third-quarter earnings and revenue expectations. (DreamstiMe)

Key Points

• Carnival reports adjusted earnings of $1.43 a share on revenue of $8.2 billion, exceeding analysts’ expectations of $1.32 and $8.1 billion, respectively.
• The results are driven by resilient cruise demand and robust advanced bookings for 2026.
• Booking trends have strengthened since May, with higher volumes than last year and prices at historical highs, outpacing capacity growth.

Carnival stock fell Monday, reversing course quickly after the cruise operator beat earnings and revenue expectations in a stellar fiscal third quarter.

Cruise demand is proving resilient with Carnival reporting a strong advanced booking positions for 2026—in line with record 2025 levels and at historical high prices.

Even so, the shares were down 4.6% to $29.21 after initially surging more than 5% ahead of the open of trading.

That seems like a harsh reaction. Carnival even hiked its full-year earnings guidance to $2.14 a share, up from $1.97. Its fourth-quarter earnings outlook for 23 cents a share also was ahead of Wall Street estimates.

“Since May, booking trends have continued to strengthen with higher booking volumes than last year and far outpacing capacity growth,” CEO Josh Weinstein said.

The company reported adjusted earnings of $1.43 per share on revenue of $8.2 billion. Analysts were expecting adjusted earnings of $1.32 per share on revenue of $8.1 billion, according to those polled by FactSet.

Jefferies analysts led by David Katz saw positives in Carnival’s earnings, maintaining a Buy rating with a $31 price target.

“Carnival delivered another beat and raise, which further supports our bullish thesis and should be positive for the shares,” they said, adding that the stock remains one of Jefferies’ top picks in the leisure sector.

Heading into earnings, the stock has risen 23% this year—underperforming its rival Royal Caribbean , up 42% over the same period, but outperforming Norwegian Cruise Line’s 3% fall.

All three have recovered well from their early April lows, around the time President Donald Trump announced sweeping tariffs. Demand for cruises has remained strong in the months since, despite fears of a travel slowdown.

The third quarter, which for Carnival runs to the end of August, is typically the strongest for cruise operators as it covers the peak summer period.

Maybe that, along with the stock’s impressive recent recovery, was enough for investors to conclude that the cruise rally could be over.

Write to Callum Keown at callum.keown@dowjones.com