Carnival Earnings Anxiety: The Good, Bad, and Ugly

The world's largest cruise line operator by revenue is pulling into port, financially speaking, next week. Carnival Corp. (NYSE: CCL) will announce its fiscal first-quarter results on Friday morning, March 29. There's a lot riding on the report.

Carnival stock has been volatile, but it has fared well for investors who have held through the ups and downs. The stock is coasting past the market, up 25% over the past year. The shares have nearly tripled over the past three years.

Zoom in a little closer, and the stock chart's not exactly a pleasure cruise. The shares are down 20% over the past six months, sliding 18% in 2026. With Carnival shares likely on the move by the end of next week, let's take a look at the good, the bad, and the ugly heading into the cruising bellwether's telltale critical performance update.

Image source: Getty Images.

The good

Carnival stock investors have a good reason to expect a blowout bottom-line performance next week. Analysts see the cruiser earning $0.18 a share for the fiscal quarter that ended last month. This is well ahead of the $0.13 a share it posted a year earlier.

There are two good reasons to expect a beat. The biggest reason is that it's exactly what Carnival has done consistently over the past three years. Let's look back on the last 10 fiscal quarters, comparing market expectations to reality.

Data source: Yahoo! Finance. EPS = earnings per share (adjusted).

Carnival isn't just beating the estimates. It has landed at least 9% ahead of those profit targets. No winning streak lasts forever, but the odds appear to be in the cruise ship operator's favor until it proves mortal.

The second reason to hold out for a beat is that it's exactly what its peers have been doing since Carnival's last report. They operate on a different fiscal calendar than Carnival. The only overlap in their reports would be the month of December. The trend still favors the industry's good fortune.

The bad

Notice I conveniently left out Carnival's top-line expectations. It's less impressive than the projected 38% jump in earnings per share.

Analysts see revenue rising just shy of 6% to hit $6.13 billion. One can argue that this is a seasonal business, and one shouldn't put too much weight on a quarter that will account for less than 22% of its annual revenue. Here's the worst part: Carnival's modest year-over-year increase isn't a fluke.

This would be the fifth consecutive quarter of single-digit growth. Adding insult to injury, analysts see the next three largest cruise companies posting double-digit revenue gains in their quarters that end a month later.

The ugly

There was plenty of optimism for Carnival earlier this year. Momentum was strong. Carnival had reinstated its quarterly dividend over the holidays. Demand was booming, with fiscal 2026 capacity already roughly two-thirds booked and capacity deposits 7% higher than a year earlier.

Sentiment is a dish best served cold these days. The escalating skirmish in Iran is weighing on Carnival's near-term growth prospects in several ways. Fuel costs are a major component of cruise costs. Prices are on the rise. There's also the inflationary nature of the situation. A cruise is a discretionary expense. Paying more to fuel up your car -- or to buy products that were marked up to cover their rising transportation costs -- weighs on your ability to pay for other stuff.

It's also probably not a surprise that Carnival is the worst-performing stock among the cruise line stocks in 2026. Carnival has a few luxury lines, but its dominant namesake brand is the entry-level cruising opportunity for the masses. If anyone is going to nix cruise plans in a softening economy with percolating fears of safety on the open seas, it's going to be Carnival customers.

Tune in to Carnival's report next week. The stock is cheap enough to consider, even as the first potential domino to drop. You can buy the stock for just 10 times this fiscal year's profit target and 9 times next year's analyst forecast. This could fall apart -- and begin escalating fears elsewhere -- if Carnival offers a weak outlook on booking trends. Enjoy the cruise, but know where the lifeboats are.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool recommends Carnival Corp. The Motley Fool has a disclosure policy.