Carnival up 11% on record Q3 as fuel cost per ton jumps 36%; Q4 fuel bill set to top twice its profit

Carnival shares traded at $24.61 at 9:52 a.m. ET on Tuesday, up $2.47 or 11.2%, according to Nasdaq quote data, after the cruise operator reported fiscal third-quarter results that came in ahead of Wall Street's numbers. Adjusted earnings were $1.43 a share on revenue of $8.44 billion, against analyst estimates of $1.35 and $8.35 billion, StockStory reported via Yahoo Finance. Net income for the quarter ended August 31 was $1.92 billion, a company record.

Even after the jump, the stock sits well inside its 52-week range of $21.45 to $34.03.

The fuel line the headline skips

The quarter was flat on earnings per share, not up, and fuel is why. According to the earnings release filed with the SEC, Carnival paid $826 per metric ton of fuel in the quarter, up from $607 a year earlier, a 36% increase. Fuel expense rose from $451 million to $615 million even though the fleet burned 3.8% less fuel per unit of capacity. The company put the combined drag from fuel and currency at $131 million, or 10 cents a share.

The fourth quarter looks harder. Carnival now expects to pay $896 a ton, and it raised its full-year fuel assumption to $768 a ton and $2.25 billion of expense, from $713 a ton and $2.12 billion in the June guidance. For the quarter itself, it budgets $0.64 billion of fuel against roughly $274 million of adjusted net income, or about 20 cents a share. Fuel alone will cost more than twice what the company expects to keep.

That is why the sensitivity table matters to anyone tracking oil. Carnival says a 10% move in its fourth-quarter fuel price changes adjusted net income by $59 million, more than a fifth of the quarter's expected profit. November crude was quoted at $90.74 on Yahoo Finance's market bar Tuesday morning, down 2% on the day.

What offset it

Management said operating gains of more than $150 million, from better pricing, lower non-fuel costs and lower fuel burn, cancelled out a $150 million hit from higher fuel prices. The net result is a small raise: full-year adjusted EPS of about $2.24 against $2.22 in June, and adjusted net income of about $3.08 billion against $3.07 billion. Net yields in constant currency are now expected to rise about 2.3% for the year, from 1.75% in June.

Demand indicators were the strongest part of the release. Customer deposits reached $7.6 billion, a third-quarter record and $0.5 billion above last year, while capacity for the next twelve months is flat. The company said 2027 booked occupancy and pricing are both at record levels. Seeking Alpha highlighted the deposit figure as a roughly 7% gain on flat capacity.

The balance sheet is doing quiet work

Total debt fell to $23.9 billion at August 31 from $26.6 billion at the end of November, and cash stood at $1.22 billion, which puts net debt near $22.7 billion. Quarterly interest expense dropped to $285 million from $317 million a year earlier. Carnival redeemed $500 million of 7% notes during the quarter, said S&P had raised it to investment grade, and has bought back about $1.2 billion of stock this year while paying $618 million in dividends.

The lower interest bill softens the fuel hit but does not erase it: the $32 million saved on interest this quarter compares with $164 million more spent on fuel. For traders, the fourth quarter now rests heavily on where marine fuel settles. Carnival's executives were scheduled to take analyst questions on a 10 a.m. ET call.

Sources: Carnival filings on SEC EDGAR (Q3 and Q2 2026 earnings releases); StockStory via Yahoo Finance; Seeking Alpha; Nasdaq quote data (9:52 a.m. ET). This is market information, not investment advice.