Carnival's Q3-Q4 2025 Earnings Calls Highlight Contradictions in Booking Momentum, 2026 Yield Outlook, Cost Savings, and Consumer Demand, Prompting Investor Scrutiny

Business Commentary:

Key Theme:* Record Financial Performance and Guidance for 2026: (Financial Performance) - Data and its trends: - The company delivered record fourth-quarter financials, with full-year net income exceeding $3 billion, up 60% over 2024 and exceeding initial guidance. Yields improved more than 5.5% for the full year. - For 2026, guidance includes net income of over $3.45 billion, up more than 12% vs. 2025. EBITDA guidance is $7.6 billion. The company also plans to resume a dividend. - Reasons and cause:
- Strong commercial execution across all cruise lines drove yield growth. Effective cost management mitigated inflation and offset capacity growth costs. The company is well-positioned for 2026 with ~2/3 of bookings already made at historical high prices.

Key Theme:* Cost Management and Margin Expansion: (Cost & Profitability) - Data and its trends: - Full-year 2025 cruise costs without fuel per ALBD were up only 0.5%, significantly better than initial guidance.
- For 2026, cruise costs without fuel are guided up 3.25% (normalized ~2.5%), with cost mitigation from efficiency initiatives offsetting inflation. - Reasons and cause:
- The company successfully implemented cost-saving initiatives, leveraged industry-leading scale, and managed the timing of expenses (e.g., new destination costs). This allowed for a return to more normalized unit cost growth while expanding operating and EBITDA margins.

Key Theme:* Resilient Demand and Booking Momentum: (Demand & Bookings) - Data and its trends: - Bookings for 2026 are ~2/3 booked, in line with last year at this time and at historical high prices. Over the last 3 months, booking volumes reached record levels for 2026 and 2027. - Customer deposits were up 7% year-over-year, hitting an all-time high for year-end. - Reasons and cause:
- Demand remains resilient despite low consumer sentiment. The company's diversified global portfolio and strong brand positioning (e.g., #1 or #2 in major markets) drive value-conscious consumer prioritization. Effective yield management and marketing also support strong bookings.

Key Theme:* Strategic Capital Allocation and Balance Sheet Improvements: (Capital & Leverage) - Data and its trends: - The company achieved an investment-grade net debt-to-EBITDA ratio of 3.4x at year-end 2025. It is targeting a ratio below 3x by year-end 2026. - Actions include a $19 billion refinancing plan that reduced debt by over $10 billion since the peak and simplified the capital structure. - Reasons and cause:
- Strong operating performance and disciplined deleveraging enabled the improvement. The company now formally resumes a dividend at $0.15 per quarter, expects to delever further, and will consider opportunistic share repurchases.

Key Theme:* Corporate Structure Simplification: (Governance) - Data and its trends: - The company recommends unifying its dual-listed company (DLC) structure into a single entity listed on the NYSE. - Reasons and cause:
- The unification aims to create a single global share price, streamline governance and reporting, reduce administrative costs, increase liquidity, and improve stock weightings in U.S. indices. Shareholders will vote on the plan in April 2026.