Rick Munarriz, The Motley Fool

Wed, Jun 25, 2025, 7:03 AM5 min read

• Carnival delivered better-than-expected financial results for its fiscal second quarter.

• Most trends continue to improve, but there are some potential headwinds for the cruise line industry.

• Carnival's trailing net margin is still shy of 10%. It peaked at 17% before the pandemic, giving it some more bottom-line upside even if the top line starts to slow.

• 10 stocks we like better than Carnival Corp. ›

Carnival Corp. (NYSE: CCL) has been a pleasure cruise to many of its recent investors. Shares of the world's largest cruise line operator have coasted nearly 60% higher over the past year. The latest step up came earlier this week, when Carnival posted better-than-expected financial results.

Momentum has been strong for Carnival and its fellow cruise line stocks, but Tuesday's report wasn't perfect. Still, that doesn't mean the past year will be a hard act to follow, even if it's unlikely that the shares jump another 60% in the next 12 months. Let's take a closer look at Carnival's remarkable recovery, some impressive streaks it has going on, and ultimately where the shares could be trading a year from now.

Carnival has done nothing but crank out positive earnings surprises since resuming operations after the pandemic-related stoppage. Tuesday morning's update was the latest installment of humbling the Wall Street pros. Revenue for its fiscal second quarter that ended in May rose 9.5% to $6.33 billion, comfortably ahead of the 7.5% increase analysts were expecting.

The news was even better at the other end of the income statement. Analysts figured that Carnival's adjusted profit would more than double to $0.24 a share. It turned out to more than triple to $0.35 a share. Carnival has landed ahead of Wall Street profit targets for 11 consecutive quarters. An even more impressive streak is that Carnival's been serving up double-digit percentage beats in the the last eight reports.

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

These are some encouraging trends, but there's a shorter streak propelling Carnival higher this fiscal year. The cruising bellwether began its 2025 prognostications in December, modeling an adjusted profit of $1.70 a share for the fiscal year ending in November. It updated that target to $1.83 in March. On Tuesday, Carnival revised that bottom-line goal to $1.97 a share. Back-to-back guidance boosts create a more favorable valuation profile while also validating bullish momentum.