CCL — Q2 2026 Financial Report Analysis

Overview

Carnival Corporation's fiscal second quarter of 2026 covers March 1 – May 31, 2026 (its fiscal year ends November 30). Revenue reached a second-quarter record of $6.66 billion, up 5.3%, and the company's preferred profit measure, adjusted net income, rose 21% to $569 million. Reported (GAAP) net income, however, fell 5.0% to $537 million and diluted EPS dropped from $0.42 to $0.39.

The two numbers point in opposite directions for two specific reasons: last year's quarter included a one-off gain of about $103 million from selling two ships, which did not repeat, and fuel cost per metric ton rose 29% ($793 vs. $614). Strip out the ship-sale gain and operating profit was up slightly; the fuel bill is the main thing that held it back.

This is also the first quarter reported under a new corporate shell: in May 2026 Carnival completed the unification of its dual-listed structure (Carnival Corporation in the US plus Carnival plc in the UK) into a single company, Carnival Corporation Ltd., now listed only on the NYSE and legally based in Bermuda. Carnival plc shareholders received new shares one-for-one.

Key figures

Operating margin is the share of revenue left after running the ships and the company, before interest and tax. Net yield is Carnival's main pricing gauge: revenue per available berth-day (one lower bed for one day) after subtracting commissions, air travel and other direct selling costs. "Constant currency" means last year's exchange rates are applied to this year, so the figure shows price change rather than currency swings. Occupancy above 100% is normal in cruising: the industry counts two passengers per cabin, and some cabins carry a third or fourth.

What drove revenue

• Ticket revenue rose $168 million (4.1%) to $4.3 billion. The 10-Q breaks this into $80 million from 2.0% more capacity, $61 million from higher ticket prices and $60 million from favorable currency translation, partly offset by $36 million less air-travel revenue.
• Onboard and other revenue rose $166 million (7.4%) to $2.4 billion, the faster-growing line: $76 million came from guests spending more on board (drinks, excursions, specialty dining) and $53 million from added capacity.
• Currency flattered the headline yield. Net yields rose 4.3% in reported dollars but only 2.2% in constant currency, because a stronger euro, pound and Australian dollar raised the dollar value of European and Australian ticket sales. The 2.2% is the cleaner read on pricing, and management calls it the twelfth straight quarter of record net yields.
• The two regions moved differently. In North America, ticket revenue grew 2.9% on 3.4% more capacity, but occupancy slipped 1.1 points. In Europe, ticket revenue grew 6.0%, helped by $60 million of currency translation, $49 million of higher prices and a 1.1-point rise in occupancy.

What drove costs

Cruise operating expenses rose $339 million (8.7%) to $4.2 billion. According to the 10-Q, the main pieces were:

• $121 million from higher fuel prices. Burning 5.6% less fuel per berth-day (28.2 vs. 29.9 metric tons per thousand berth-days) saved $23 million, only a fraction of the price increase.
• $103 million from the absence of last year's ship-sale gains (one North America ship and one Europe ship sold in Q2 FY2025). This is an accounting comparison effect rather than a new cost, and it accounts for most of the drop in GAAP profit.
• $30 million of extra crew travel costs caused by the Middle East conflict, which also weighed on Mediterranean bookings.
• These were partly offset by $42 million lower repair and dry-dock spending.

Excluding fuel, adjusted cruise costs per berth-day were flat year over year in constant currency ($117.60 vs. $117.45). Keeping non-fuel costs flat is how the company absorbed most of the fuel increase.

Interest expense fell $56 million (16%) to $285 million because Carnival has less debt at lower average rates. That is the main reason adjusted earnings grew faster than revenue. Total debt fell from $26.6 billion at November 30, 2025 to $24.9 billion, and management puts net debt at 3.1x adjusted EBITDA (earnings before interest, tax, depreciation and amortization), more than half a turn lower than a year earlier. Management also cited a recent Moody's credit-rating upgrade.

Bookings and cash

Customer deposits, the cash guests pay upfront for future cruises, hit a record $9.0 billion ($8.98 billion on the balance sheet), up more than $450 million from last year's record. Management says it is 93% booked for full-year 2026 at historically high prices, with less unsold inventory than a year ago. Operating cash flow for the quarter was $2.63 billion, against $875 million of capital spending.

Shareholder returns have restarted in earnest. Carnival paid $207 million in dividends in the quarter ($414 million year to date) and, under a $2.5 billion buyback program announced in March, had repurchased more than $450 million of stock by the June 23 release ($381 million of it in the first half).

Takeaway: The 5% drop in GAAP net income is mostly a comparison against last year's $103 million ship-sale gain, not weaker business. The underlying picture is modest price gains (+2.2% constant-currency yields), flat non-fuel unit costs and lower interest expense, which together absorbed a nearly 30% fuel price increase. The two things to watch are fuel and Mediterranean demand, not bookings in general.

Outlook

Management's June guidance for fiscal Q3 (June–August 2026): net yields up about 1.2% in constant currency on 1.5% more capacity, adjusted cruise costs excluding fuel per berth-day up about 2.8%, fuel at about $812 per metric ton, and adjusted EPS of about $1.35 (adjusted net income of about $1.86 billion). For full-year 2026: net yields up about 1.75% in constant currency (about 3.2% in reported dollars), adjusted EBITDA of about $7.11 billion and adjusted EPS of about $2.22. Guidance assumes fuel stays at spot prices; by the company's own sensitivity table, a 10% move in fuel prices changes remaining-2026 adjusted net income by about $102 million.

Our read: the second-half guide builds in slower pricing growth (Q3 yields +1.2% vs. +2.2% in Q2), which management attributes to the Middle East conflict hurting European, especially Mediterranean, bookings. Because Q3 is the peak summer quarter, a slowdown there matters more than one in Q2. In Carnival's favor are record deposits, a 93%-booked year, and bookings for 2027 that management says are running ahead of last year on both volume and price, including European itineraries. Fuel is the main risk to earnings in the rest of the year. Fiscal Q3 results are scheduled for September 29, 2026; they will show whether summer pricing held up against that guidance.