Carnival surges on record earnings and $2.5B buyback announcement
Cruise operator raises guidance and launches inaugural share repurchase program as demand reaches all-time highs
Carnival Corporation shares jumped Friday after the world's largest cruise operator reported record first-quarter operating results and announced an inaugural $2.5 billion share buyback program, marking a significant milestone in the company's post-pandemic recovery.
The Miami-based operator delivered adjusted earnings per share of $0.13, handily beating analyst estimates of $0.02, while revenues surged to a record $5.8 billion—an increase of more than $400 million compared to the prior year. Net yields in constant currency rose 7.3% year-over-year, significantly outperforming December guidance by 270 basis points.
Chief Executive Josh Weinstein described the quarter as "truly characterized by outperformance," noting "incredibly strong demand throughout our portfolio including exceptional close-in demand that exceeded expectations for both ticket prices and onboard spending."
The strong operational performance prompted Carnival to raise its full-year 2025 guidance. Adjusted net income is now projected to increase more than 30% compared to 2024, an improvement of $185 million from December guidance. The company also increased its net yield outlook to 4.7% growth versus 2024, representing a 0.5 percentage point upgrade.
In perhaps the most significant development for shareholders, Carnival's board approved an initial $2.5 billion share repurchase program—its first since emerging from the pandemic crisis. The buyback program is set to commence following shareholder meetings anticipated in April 2026.
"Initiating the opportunistic buyback program reflects our strong and growing free cash flow generation and ongoing commitment to returning value to shareholders," said David Bernstein, Carnival's chief financial officer.
Carnival also unveiled its "PROPEL" initiative, a comprehensive set of long-term financial targets extending through 2029. The program aims to deliver approximately $14 billion in shareholder distributions over the next four years, representing more than 40% of cash from operations. Key targets include achieving greater than 16% return on invested capital and delivering more than 50% adjusted EPS growth from the 2025 base.
Customer bookings continue to demonstrate robust momentum. Total customer deposits reached a first-quarter record of $7.3 billion, surpassing the previous record set in February 2024. The booking curve remains the farthest out on record at record prices, according to management, with 2026 and beyond booking volumes reaching all-time highs at higher prices.
Carnival's balance sheet strength also improved during the quarter. The company refinanced $5.5 billion of debt, generating $145 million in annualized interest savings and reducing its average cash interest rate to 4.6%. The improved credit metrics prompted Moody's to upgrade the company's credit rating and maintain a positive outlook, reflecting progress toward investment-grade status.
Operating income for the quarter doubled to $543 million, while adjusted EBITDA jumped 38% to $1.2 billion. The company achieved record adjusted EBITDA per available lower berth, reaching the highest levels in nearly two decades.
The operational turnaround comes despite challenging macroeconomic conditions and geopolitical volatility that have weighed on consumer discretionary spending. Weinstein emphasized that cruise vacations offer compelling value, stating, "Our value for money is truly a strength when people look to make their vacation dollars go further."
Analysts have maintained a largely positive outlook on Carnival shares, with 20 of 29 analysts rating the stock a buy or strong buy, according to recent data. The consensus price target stands at $36.48, representing significant upside from current levels around $25.
Carnival's shares have been volatile over the past year, trading in a 52-week range between $15.00 and $33.87, as investors weighed the company's recovery trajectory against elevated debt levels accumulated during the pandemic. The new buyback program and ambitious long-term targets represent a vote of confidence from management that the worst is behind the world's largest cruise operator.