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CARNIVAL PLC (CUK)·Q4 2024 Earnings Summary

Executive Summary

  • Carnival delivered a record Q4 with revenue of $5.94B, GAAP EPS $0.23, and adjusted EPS $0.14; adjusted net income and EBITDA beat September guidance by $126M and $80M respectively, driven by stronger ticket pricing, onboard spend, and cost favorability .
  • Net yields (constant currency) rose 6.7% YoY vs prior guidance of ~5.0%; adjusted cruise costs ex fuel per ALBD rose 7.4% YoY vs prior guidance of ~8.0% (better than plan) .
  • 2025 outlook targets ~4.2% net yield growth (cc), adjusted EBITDA ~$6.6B, and adjusted net income ~$2.305B; management expects >20% EPS growth in 2025 and to hit the 2026 SEA Change EBITDA target one year early .
  • Narrative catalysts: record demand and booked position with higher price and occupancy across all four quarters of 2025, improving leverage (net debt/adj. EBITDA 4.3x), and emerging destination strategy (Celebration Key, RelaxAway Half Moon Cay) to support pricing power .

What Went Well and What Went Wrong

What Went Well

  • Record Q4 revenues ($5.94B) and adjusted EBITDA ($1.22B) with broad-based strength in pricing and onboard spend; GAAP net income improved by >$250M YoY and exceeded guidance by $125M .
  • Advanced booking position at all-time highs: price and occupancy higher for each quarter of 2025; longest advanced booking windows on record in North America and Europe .
  • Leverage improvement: net debt/adjusted EBITDA at 4.3x; interest expense expected >$200M lower YoY in 2025 with opportunistic refinancing .

Management quotes:

  • “This has been an incredibly strong finish to a record year… outperformed our initial 2024 guidance by $700 million and delivered nearly $2 billion more to the bottom line” — CEO Josh Weinstein .
  • “We achieved a 4.3x net debt to adjusted EBITDA ratio… positioning us three-fourths of the way to our initial leverage target” — CFO David Bernstein .

What Went Wrong

  • Cost inflation and operational items: adjusted cruise costs ex fuel per ALBD rose 7.4% YoY (cc) in Q4; 2025 guide implies ~3.7% increase driven by higher dry-dock days (+17%), Celebration Key operating costs (+0.5 pt), and advertising .
  • Red Sea disruption normalized but limits year-over-year “bounce-back” in 2025; normalization implies cleaner 2026 comps vs 2025 .
  • Regulatory/macro risks: EU ETS EUA coverage rises to 70% in 2025 (about $0.03 per share headwind), and evolving Mexico passenger charge proposal (no impact embedded in 2025 plan; <5% itineraries affected if implemented) .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenues ($USD Billions)$5.397 $7.896 $5.938
Diluted EPS ($USD)$(0.04) $1.26 $0.23
Adjusted EPS ($USD)$(0.07) $1.27 $0.14
Net Income ($USD Billions)$(0.048) $1.735 $0.303
Adjusted Net Income ($USD Billions)$(0.090) $1.751 $0.186
Adjusted EBITDA ($USD Billions)$0.946 $2.822 $1.220
Gross Margin Yield ($/ALBD)$50.47 $116.77 $60.57
Net Yields ($/ALBD)$176.20 $233.87 $190.53

KPIs

KPIQ4 2023Q3 2024Q4 2024
ALBDs (millions)23.2 25.2 23.9
Occupancy (%)101% 112% 103%
Passengers carried (millions)3.1 3.9 3.3
Fuel cost per metric ton (ex EUA) ($)$759 $670 $618
Fuel consumption (million metric tons)0.7 0.7 0.7
Customer deposits ($USD Billions)$6.353 $6.819 $6.779
Liquidity ($USD Billions)$5.392 $4.519 $4.155

Segment breakdown

SegmentQ4 2024 RevenueNotes
Not disclosedN/ACompany reports consolidated results; segment-level revenue not provided in Q4 8-K .

Guidance Changes

Q4 2024 actual vs prior (September) guidance

MetricPeriodPrevious GuidanceActualChange
Net yields (YoY, constant currency)Q4 2024~+5.0% +6.7% Raised vs guide
Adjusted cruise costs ex fuel per ALBD (YoY, cc)Q4 2024~+8.0% +7.4% Lower than guide (better)
Adjusted EBITDA ($USD Billions)Q4 2024~$1.14 $1.22 Beat (~+$0.08)
Adjusted net income ($USD Millions)Q4 2024~$60 $186 Beat (~+$126)
Adjusted EPS - diluted ($USD)Q4 2024~$0.05 $0.14 Beat (~+$0.09)

1Q 2025 and FY 2025 guidance (current; prior guide not provided)

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net yields (YoY) – current dollars / constant currency1Q 2025n/a~3.5% / ~4.6% New
Net yields (YoY) – current dollars / constant currencyFY 2025n/a~3.2% / ~4.2% New
Adjusted cruise costs ex fuel per ALBD (YoY) – current dollars / cc1Q 2025n/a~2.4% / ~3.4% New
Adjusted cruise costs ex fuel per ALBD (YoY) – current dollars / ccFY 2025n/a~2.7% / ~3.7% New
Adjusted EBITDA ($USD Billions)1Q 2025n/a~$1.04 New
Adjusted EBITDA ($USD Billions)FY 2025n/a~$6.6 New
Adjusted net income ($USD Millions)1Q 2025n/a~$1 New
Adjusted net income ($USD Millions)FY 2025n/a~$2,305 New
Adjusted EPS - diluted ($USD)1Q 2025n/a~$0.00 New
Adjusted EPS - diluted ($USD)FY 2025n/a~$1.70 New
Interest expense, net ($USD Billions)1Q 2025n/a$0.38 New
Interest expense, net ($USD Billions)FY 2025n/a$1.50 New
D&A ($USD Billions)1Q 2025n/a$0.66 New
D&A ($USD Billions)FY 2025n/a$2.77 New
Fuel expense incl EUA ($USD Billions)1Q 2025n/a$0.45 New
Fuel expense incl EUA ($USD Billions)FY 2025n/a$1.89 New
Fuel cost per metric ton (ex EUA) ($)1Q 2025n/a$616 New
Fuel cost per metric ton (ex EUA) ($)FY 2025n/a$617 New
ALBDs (millions)2025 by Qn/aQ1: 23.6; Q2: 24.3; Q3: 24.6; Q4: 23.9; FY: 96.3 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Demand/BookingsQ2: record customer deposits ($8.3B) and record booking levels; Q3: record yields/per diems, record deposits ($6.8B) Longest booking windows on record in NA/Europe; price and occupancy higher in all four quarters of 2025 Strengthening
Yield Management/Per DiemsQ2 net per diems up >6%; Q3 net yields up 8.7% YoY (cc) Net yields up 6.7% YoY (cc); gross margin yields up 20% YoY Sustained
Destination StrategyQ3: Celebration Key bookings opened; portfolio optimization discussed Celebration Key (opening Jul-2025); Half Moon Cay rebranded “RelaxAway”; exclusive destination-led pricing strategy Ramping
Cost StructureQ2 NCC ex fuel per ALBD in line; Q3 guide Q4 NCC ex fuel +8% YoY (cc) Q4 NCC ex fuel +7.4% YoY (cc); FY25 NCC ex fuel guide +3.7% (cc), impacted by dry dock and Celebration Key costs Managed increase
Leverage/RefinancingQ2: $6.6B debt prepaid over 15 months; lower interest expense run-rate; Q3: approaching ~4.5x net debt/EBITDA Net debt/EBITDA 4.3x; 2025 interest expense expected >$200M lower YoY Improving
Regulatory/Macro—EUA coverage to 70% in 2025 (~$0.03/share headwind); Mexico passenger charge proposal fluid; Red Sea normalization affects y/y comparison Mixed risks
TechnologyFleetwide Starlink and OneOcean rollout (Q2) Continued focus on tech-enabled marketing and revenue management Ongoing

Management Commentary

  • Pricing power and demand: “Prices were up in all of our major brands and trades between mid-single digit to mid-teen percentages. Onboard spending levels actually accelerated sequentially each quarter throughout the year” — CEO Josh Weinstein .
  • Destination-led strategy: “We believe we have meaningful opportunity to expand and capitalize on this strategic advantage… opening of Celebration Key in ~6 months… RelaxAway, Half Moon Cay… encourage guests to actively seek out these specific destinations offered exclusively by our brands” — CEO Josh Weinstein .
  • Cost and leverage: “We achieved a 4.3x net debt-to-EBITDA ratio… expect to opportunistically capitalize on improved interest rates… 2025 interest expense currently expected >$200M lower than 2024” — CFO David Bernstein .

Q&A Highlights

  • Celebration Key awareness and premium: Product awareness is ramping; bookings show expected premium; 5% of 2025 sailings touch Celebration Key, rising to >15% in 2026 .
  • Yield guidance conservatism: 2025 ~4.2% net yield growth (cc) mostly price-driven; management aims to optimize close-in pricing and onboard revenue, acknowledging last year’s yield outperformance vs initial guide .
  • Cost cadence: 2025 NCC ex fuel +3.7% (cc); second and third quarters likely 1.5–2 pts above full-year average due to higher dry dock days; upside from efficiency initiatives possible .
  • Mexico passenger charges: Not a done deal; active dialogue with government; no impact embedded in 2025 plan; <5% of itineraries affected if implemented .
  • Leverage targets: Focus on reaching investment-grade metrics (~3.5x); not targeting ~2x long-term; potential shareholder returns considered after balance sheet milestones .
  • Red Sea: 2024 impact ended below $100M; 2025 comps reflect itineraries sold without Red Sea; more apples-to-apples normalization in 2026 .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 and prior quarters were unavailable at time of request due to SPGI daily limit; as a result, formal “vs. Street” comparisons cannot be provided. Values retrieved from S&P Global.*
  • Company did, however, beat its September internal guidance on adjusted net income (+$126M), adjusted EBITDA (+$80M), net yields (cc) (+170 bps), and NCC ex fuel per ALBD (cc) (~60 bps better), indicating material outperformance vs its latest outlook .

Key Takeaways for Investors

  • Strong beat on Q4 vs guidance across revenue quality (net yields, per diems) and adjusted profitability, signaling durable demand and pricing power into 2025 .
  • 2025 setup: record booked position with higher price and occupancy in all quarters; net yield growth (~4.2% cc) expected to exceed unit cost growth (~3.7% cc), expanding margins .
  • Cost optics manageable: elevated dry dock and destination costs create a modest headwind offset by efficiency initiatives; EU ETS EUA expansion a minor EPS drag (~$0.03) .
  • Balance sheet improving: net debt/adj. EBITDA at 4.3x; >$200M YoY interest expense reduction expected in 2025; further upside possible from repricing callable high-coupon debt .
  • New destination strategy is a pricing catalyst: exclusive assets (Celebration Key, RelaxAway Half Moon Cay) should support yield premiums and onboard monetization, particularly as footprint expands in 2026 .
  • Trading implications: with guidance beats and strong forward indicators, near-term upside catalysts include wave season booking momentum and refinancing updates; watch for macro/regulatory headlines (EU ETS, Mexico) as swing factors .
  • Medium-term thesis: sustained yield-led margin expansion on a same-ship basis, leveraging scale, improved revenue management, and destination exclusivity, while deleveraging moves the capital structure toward investment grade .