Carnival's Q4 Earnings Outlook: Can a Strong Historical Performance and Revised Analyst Estimates Signal a Win?

Carnival Corporation (CCL) is set to release its Q4 2025 earnings on December 19, 2025, amid a backdrop of robust historical performance and evolving analyst expectations. Investors are scrutinizing whether the company's track record of beating estimates and upward revisions to full-year forecasts justify a bullish stance, despite conflicting signals in earnings surprise metrics. This analysis evaluates the predictive power of these indicators to assess the likelihood of a positive outcome.

Historical Earnings Performance: A Foundation of Growth

Carnival has demonstrated exceptional earnings growth in recent years, with an average annual earnings growth rate of 58.9% from 2020 to 2024 according to data. In Q2 2025 alone, the company reported earnings per share (EPS) of $0.43, a dramatic increase from $0.073 in Q2 2024 according to reports. Over the past four quarters, Carnival has consistently exceeded analyst expectations, with an average earnings surprise of 169.8%. For Q4 2025, analysts currently estimate EPS at $0.25, reflecting a 78.6% year-over-year increase from the prior-year quarter according to the same analysis. This trajectory suggests a strong operational recovery, driven by rebounding travel demand and cost discipline.

Analyst Estimate Revisions: Optimism Amid Discrepancies

While consensus estimates for Q4 2025 EPS hover around $0.25 according to reports, recent revisions reveal a nuanced picture. Over the past 90 days, full-year 2025 earnings estimates have risen from $1.56 to $1.64 per share according to financial data, and 2026 revenue forecasts have climbed from $23.58 billion to $23.66 billion according to the same source. This upward trend underscores growing confidence in Carnival's long-term prospects. However, Q4 2025 estimates remain fragmented: one source projects EPS at $0.21 with revenue of $5.43 billion according to earnings watch, while another anticipates $0.19 EPS and $4.78 billion in revenue according to the same report. These discrepancies highlight uncertainty about near-term demand dynamics, particularly in seasonal markets.

Earnings Surprise Metrics: A Mixed Bag of Signals

Carnival's historical earnings surprises have been volatile. For instance, in Q3 2025, the company reported EPS of $1.43, surpassing the $1.32 consensus estimate according to market data, while in Q2 2025, a 75.37% EPS surprise was accompanied by a 4.48% stock price drop after the company narrowly missed earnings targets according to financial reports. The current Earnings ESP (Earnings Surprise Predictor) for Q4 2025 is negative at -1.08%, a metric historically correlated with a lower likelihood of beating estimates according to the same analysis. This contrasts with the company's four-quarter average surprise of 169.8% according to the same source, suggesting a potential divergence between historical momentum and near-term expectations.

Stock Price Reactions: Volatility and Relative Strength

Carnival's stock has exhibited mixed post-earnings performance. For example, in Q3 2025, shares rose 9.3% over one month following a revenue beat according to market data, whereas in Q3 2024, the stock fell 3.72% despite an 8.33% EPS surprise according to financial data. Over the past six months, however, the stock has gained 19.4%, outperforming both the Zacks Leisure and Recreation Services industry and the S&P 500 according to market analysis. This resilience is supported by a forward P/E ratio of 11.68, significantly below the industry average of 17.15 according to financial reports, and a 19.33% upside implied by the $23.45 average analyst price target according to earnings forecasts.

Conflicting Signals: Weighing the Evidence

The tension between Carnival's strong historical performance and the current negative Earnings ESP raises critical questions. On one hand, the company has beaten revenue estimates in six consecutive quarters according to analyst reports and has a history of turning in sharp earnings surprises. On the other, the fragmented Q4 2025 estimates and the negative ESP suggest analysts are less confident in the near-term outlook. However, the upward revision of full-year 2025 and 2026 forecasts indicates that long-term fundamentals remain intact, with analysts projecting adjusted EBITDA of $6.6 billion and adjusted EPS of $1.70 for 2025.

Conclusion: A Calculated Bull Case

While the negative Earnings ESP introduces caution, Carnival's historical ability to exceed expectations, coupled with upward revisions to full-year forecasts, supports a cautiously bullish stance. The company's operational discipline, strong balance sheet, and alignment with a recovering travel sector provide a solid foundation. Investors should monitor the December 19 report for confirmation of sustained momentum, particularly in revenue growth and cost management. If Carnival delivers an EPS beat and reaffirms 2026 guidance, the stock's current valuation and analyst optimism could justify further gains.