Carnival Corp recently released its latest 10-Q report. The company is a cruise operator that provides leisure travel services through four segments: North America Cruise Operations, Europe Cruise Operations, Cruise Support, and Tour and Other. It also operates port destinations and islands and owns or runs hotels, lodges, glass-domed railcars, and motorcoaches under brands including AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises (Australia), P&O Cruises (UK), Princess Cruises, and Seabourn.
In Item 2, Management’s Discussion and Analysis, Carnival said passenger ticket revenues are seasonal, with the third quarter typically producing the highest demand, the highest ticket prices, and the largest share of operating income. It also said planned maintenance outages are usually scheduled in non-peak periods, and that all of Holland America Princess Alaska Tours’ revenue and operating income are generated from May through September during Alaska’s cruise season.
Carnival flagged several cost pressures and regulatory items. It said geopolitical tensions could continue to affect profitability, fuel prices remained elevated, and the EU Emissions Trading System began applying to the company on January 1, 2024 with a three-year phase-in period. The company said the ETS cost impact was $91 million in 2025, based on 70% of emissions in scope, and is expected to rise to about $160 million in 2026 when all in-scope emissions are covered.
For the three months ended August 31, 2026, passenger cruise days rose to 27.9 million from 27.5 million a year earlier, while available lower berth days increased to 24.9 million from 24.6 million. Occupancy was 111.8%, compared with 111.7%, and passengers carried increased to 3.9 million from 3.8 million.
Quarterly revenue rose on both ticket sales and onboard spending. Passenger ticket revenue increased 1.8% to $5.5 billion from $5.4 billion, driven by a $80 million capacity increase and $36 million of higher ticket prices. Onboard and other revenue climbed 6.7% to $2.9 billion from $2.7 billion, helped by $104 million of higher onboard spending and $47 million from capacity growth.
Operating expenses for the quarter increased 5.5% to $4.6 billion from $4.4 billion, led by $149 million of higher fuel prices, $70 million from the larger capacity base, and $26 million of higher emission allowance costs. Selling and administrative expense rose 7.1% to $834 million from $779 million, and depreciation and amortization increased 5.0% to $754 million from $717 million. Consolidated operating income declined to $2.2 billion from $2.3 billion, while interest expense, net of capitalized interest, fell 9.9% to $285 million from $317 million.
For the nine months ended August 31, 2026, passenger ticket revenue increased 3.4% to $13.8 billion from $13.4 billion. The gain reflected a $202 million favorable foreign currency translation impact, $173 million from a 1.3% increase in capacity, and $141 million from higher ticket prices, partly offset by a $66 million decline in air transportation revenue. Onboard and other revenue rose 7.4% to $7.4 billion from $6.9 billion, driven by $285 million of higher onboard spending, $114 million from capacity growth, and $62 million of favorable currency translation.
Nine-month operating expenses increased 6.3% to $12.8 billion from $12.0 billion. Carnival cited $212 million of higher fuel prices, $170 million from the larger capacity base, $160 million of unfavorable foreign currency translation, $103 million from the nonrecurrence of gains on ship sales in 2025, and $54 million of higher emission allowance costs. Selling and administrative expense rose 7.3% to $2.6 billion, and depreciation and amortization increased 5.3% to $2.2 billion. Today the company's shares have moved -0.49% to a price of $22.14. Check out the company's full 10-Q submission here.
