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Carnival Corporation & plc's Strong Q2 2025 Performance
Jun 24, 2025 2:00 PM - Danny Green
Image credit: Google Images
- Earnings Per Share (EPS) of $0.35, surpassing estimates.
- Record revenue of $6.33 billion, exceeding expectations.
- Challenges in debt-to-equity ratio and liquidity but solid earnings yield.
Carnival Corporation & plc, trading under NYSE:CUK, is the largest global cruise company and a major player in the leisure travel industry. It operates a diverse portfolio of cruise lines, including Carnival Cruise Line and Princess Cruises. The company competes with other cruise giants like Royal Caribbean and Norwegian Cruise Line.
On June 24, 2025, CUK reported earnings per share of $0.35, surpassing the estimated $0.24. This achievement is part of the company's highest-ever operating results for the second quarter of 2025. The company also reported revenue of approximately $6.33 billion, exceeding the estimated $6.21 billion, as highlighted by its success in surpassing 2026 SEA Change financial targets 18 months early.
Carnival's strong performance is marked by the highest levels of adjusted return on invested capital (ROIC) and adjusted EBITDA per available lower berth day (ALBD) in nearly two decades. CEO Josh Weinstein expressed pride in tripling adjusted net income, driven by record net yields and strong demand. Despite challenges, Carnival remains on track for a 4% net yield growth in the second half of the year.
The company's financial metrics provide further insights. CUK has a price-to-earnings (P/E) ratio of approximately 15.11, indicating the market's valuation of its earnings. Its price-to-sales ratio is about 1.21, suggesting how much investors are willing to pay per dollar of sales. The enterprise value to sales ratio is around 2.30, reflecting the company's total valuation compared to its revenue.
However, Carnival faces some financial challenges. The debt-to-equity ratio is notably high at 3.09, highlighting a significant reliance on debt financing. Additionally, the current ratio is 0.26, suggesting potential liquidity challenges in covering short-term liabilities. Despite these challenges, the company's earnings yield of about 6.62% indicates a solid return on investment.
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