Carnival Corporation Sets Sail for Record-Breaking Year
The first quarter of 2025 has been a resounding success for Carnival Corporation and plc, with the company delivering a fantastic quarter, hitting high watermarks for revenue, EBITDA, EBITDA per ALBD, operating income, and customer deposits. According to Josh Weinstein, CEO, this was achieved through incredibly strong demand throughout their portfolio, driven by robust 7.3% yield increase, which surpassed last year's 17% yield improvement.
One of the key highlights from the quarter was the near-doubling of operating income and EBITDA reaching $1.2 billion, approaching a 40% year-over-year increase. Operating margins and EBITDA margins each improved over 400 basis points year-over-year, surpassing 2019 levels. This successful execution has enabled Carnival to take up their earnings guidance for the year by $185 million.
The company's strong performance is not limited to the first quarter alone. With yield growth far outpacing historical growth rates and nicely exceeding unit cost growth, Carnival is on track to deliver approximately $600 million incrementally to the bottom line, more than a 30% improvement from 2024, despite flat capacity growth. Achieving their March guidance will also result in reaching both of their 2026 SEA Change financial targets 1 year early, with ROIC hitting 12% and EBITDA per ALBD more than 50% higher than just 2 years ago.
Carnival's commitment to sustainability is also noteworthy. The company is closing in on its 2026 greenhouse gas target with an over 19% reduction in carbon intensity compared to 2019. This achievement is a testament to their dedication to reducing their environmental footprint while maintaining strong financial performance.
The company's marketing efforts have been highly effective, with new campaigns across all major brands driving more broad-based consideration for cruise travel and keeping the strong momentum going. Costa Cruise Line's partnership with Italy's most renowned music events, Carnival Cruise Line's Oscar-themed promo featuring a daring skydive into a pool onboard Celebration, and their Super Bowl commercial in New Orleans are just a few examples of how Carnival is staying ahead of the curve.
In conclusion, Carnival Corporation has set sail for a record-breaking year, driven by strong demand, yield growth, and effective marketing efforts. Their commitment to sustainability and dedication to achieving their financial targets make them an attractive player in the cruise industry. As Josh Weinstein said, "We have no plans to let up anytime soon." This sentiment is certainly reflected in the company's performance, and investors can expect a bright future for Carnival Corporation and plc.
