Why Carnival Stock Jumped Today

Shares of Carnival (NYSE: CCL)(NYSE: CUK) climbed on Friday after the cruise line announced record earnings and issued an upbeat forecast for the year ahead.

Carnival's profits are soaring

Carnival's fourth-quarter revenue rose 7% year over year to $6.3 billion. The company's net yields -- a key indicator of pricing power that subtracts certain variable costs from revenue per available passenger cruise day -- improved by 5.4% on a constant currency basis to $200.84.

These gains, combined with Carnival's cost-control initiatives, helped to drive its adjusted net income higher by a whopping 140% to $454 million, or $0.34 per share. That bested Wall Street's estimates, which had called for adjusted per-share earnings of $0.25.

For the full year, Carnival's adjusted net income surged by more than 60% to $3.1 billion.

"The momentum is carrying into 2026, which is shaping up to surpass even these remarkable results with another year of double-digit earnings growth and return on invested capital expected to exceed 13.5%, closing in on our 20-year high," CEO Josh Weinstein said in a press release.

Carnival is reinstating its dividend

Carnival has used some of its free cash flow to pay down over $10 billion of debt in less than three years. Now with lower leverage ratios and a stronger balance sheet, the cruise ship leader decided the time was right to begin returning capital to shareholders.

Carnival's board of directors approved the reinstatement of its quarterly cash dividend at an initial rate of $0.15 per share payable on Feb. 27.

"This decision highlights confidence in our future performance and continued commitment to delivering value to shareholders," CFO David Bernstein said.

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