Carnival (CCL) Cruises Higher on Strong Results to Close 2024
2min read Carnival Corporation concluded fiscal year 2024 on a high note, signaling robust growth and strong future potential within the cruise industry. Despite an earnings beat for the fourth quarter that didn’t reach the double-digit surprises seen in earlier quarters, the company’s performance demonstrated resilience and ongoing recovery post-pandemic.
Adjusted EPS for Q4 stood at \$0.14, a significant improvement from a \$(0.07) loss in the same period last year. Moreover, the outlook for Q1 2025 has improved to roughly breakeven, contrary to analyst expectations of a slight loss, showcasing the company’s operational momentum.
Revenue for the quarter increased by 10% year-over-year to \$5.94 billion, aligning with expectations, while adjusted EBITDA reached a record \$1.22 billion, exceeding the prior guidance of \$1.14 billion. Carnival’s guidance for fiscal year 2025 includes an adjusted EBITDA of approximately \$6.60 billion, indicating confidence in sustained growth.
One of the standout achievements of FY24 was the company’s ability to implement price increases across all major cruise brands, with price growth ranging from mid-single digits to mid-teens.
Simultaneously, onboard spending levels accelerated sequentially throughout the year, reflecting enhanced passenger engagement and spending habits. This pricing power underscores a favorable demand environment, where consumers are willing to pay a premium for Carnival’s offerings.
Carnival is leveraging this robust demand by enhancing its destination strategy, aiming to provide guests with unique and compelling reasons to cruise. The outlook for FY25 is particularly optimistic, with yield growth expected to outpace historical rates. Booking trends further support this optimism: Q4 2024 saw higher booking volumes for 2025 sailings compared to the previous year, even amidst traditionally slower election-period travel.
Additionally, bookings for 2026 broke records, underscoring sustained demand and increasing consumer confidence in future travel plans. Carnival’s North American and European markets are now at their longest advanced booking windows in company history, a testament to effective marketing and strategic planning.
Carnival’s results also reflect a broader recovery trajectory for the cruise industry, which has taken longer than initially anticipated following the pandemic. The company’s ability to raise prices while maintaining strong demand signals both operational efficiency and a compelling value proposition for its customers. Carnival’s continued investment in enhancing the cruise experience, coupled with its forward-looking booking strength, positions it well for sustained growth in 2025 and beyond.
However, potential investors should consider that Carnival’s FY25 EPS guidance of \$1.70 fell slightly below analyst expectations. While this may introduce some caution, the broader indicators—including record-high revenues, unprecedented booking trends, and strong EBITDA growth—paint a largely positive picture. The company’s strategic focus on pricing, onboard experiences, and destination innovation suggests an ability to navigate challenges effectively while capitalizing on demand.
In conclusion, Carnival’s FY24 performance and FY25 outlook reflect a business on the rebound, with significant growth prospects in the near term. The combination of pricing power, record bookings, and operational efficiency makes Carnival a compelling player in the travel and leisure sector. While the stock has faced a protracted recovery, its current trajectory suggests a healthy demand environment and a promising future for investors seeking exposure to the cruise industry.
