What happened

Carnival Corp. (CCL 0.41%) was cruising on Tuesday, up about 5.7% as of noon ET. It had been up as much as 7.8% in the morning session. The stock was trading at about $9.30 per share as of noon ET, up about 15.5% year to date.

The major indexes were mixed on Tuesday. The S&P 500 was down two points, the Dow Jones Industrial Average was up 84 points (0.3%), and the Nasdaq Composite was down 63 points (negative 0.5%) at noon ET.

So what

Carnival Corp. had a choppy couple of days. On Monday, the stock dropped 6.4% to about $8.79 per share on a first-quarter earnings report that showed pretty strong results.

The company posted a net loss of $693 million, or negative $0.55 in diluted earnings per share (EPS) for the quarter ended Feb. 28. This was better than the net loss range of $750 million to $850 million that it had previously predicted in December guidance.

Also, revenue came in at $4.4 billion, which was at 95% of 2019 pre-pandemic levels. In the previous quarter, revenue was at 80% of 2019 levels. Further, the company broke records for booking volumes in North America, Australia, and Europe and had its highest booking volumes for any quarter in its history.

Carnival CEO Josh Weinstein said:

In the first quarter, we outperformed our guidance on all measures. We achieved record first quarter net per diems, exceeding the high end of our guidance, driven by improving ticket prices and sustained growth in onboard revenue, while delivering an additional seven points of occupancy on higher capacity compared to the prior quarter.

So why the Monday drop?

The guidance called for a larger-than-expected adjusted net loss of $525 million to $425 million in Q2 and $550 million to $350 million for the full fiscal year, mainly due to higher expenses, including increased fuel costs. Both were short of analysts' estimates.

Now what

The stock price bounced back on Tuesday, as several analysts were bullish on the stock. Wells Fargo upgraded it to equal weight, while Barclays pushed the price target from $12 per share to $13 per share.

Credit Suisse maintained its outperform rating and increased the price target to $18 per share from $16. Analyst Benjamin Chaiken cited better-than-expected Q1 results and solid business trends for Q2 and beyond.

In the outlook, CEO Weinstein said the company is "well booked for the remainder of the year at higher prices," with occupancy rates expected to hit 98% in the second quarter and 100% for the full year.

Analysts at Stifel called the outlook for Carnival "overly compelling." They also said the guidance that spooked investors Monday was probably a low-ball estimate, as management has a track record for setting lower expectations and beating them.