What Happened?
Shares of cruise ship company Carnival (NYSE:CCL) jumped 8.5% in the morning session after the company reported fourth-quarter 2025 earnings that beat profit expectations and provided an optimistic forecast for the upcoming year.
While the company's revenue of $6.33 billion for the quarter came in slightly below Wall Street's estimates, investors focused on the stronger-than-expected profitability. Carnival posted an adjusted earnings per share of $0.34, significantly surpassing the consensus estimate of $0.25.
Additionally, its adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), a key measure of profitability, also exceeded expectations. Looking ahead, Carnival issued guidance for the full year 2026 that was ahead of analyst forecasts for both adjusted EPS and EBITDA, signaling management's confidence in continued financial strength and driving positive investor sentiment.
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What Is The Market Telling Us
Carnival’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 28 days ago when the stock gained 5.3% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut.
New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
Carnival is up 23.2% since the beginning of the year, and at $30.81 per share, it is trading close to its 52-week high of $32.49 from August 2025. Investors who bought $1,000 worth of Carnival’s shares 5 years ago would now be looking at an investment worth $1,463.
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