Carnival Rides High on Strong Cruise Demand and Lower Costs to Boost Profit Outlook, Reports Reuters

Carnival Corp has raised its annual profit forecast for the third time, following strong demand for cruise vacations and reduced operational costs, as reported on Monday. The cruise industry has seen increased interest in sea vacations, particularly during the summer, contributing to a strong year for cruise operators as more travelers choose this holiday option.

CEO Josh Weinstein stated that the strong demand has allowed the company to enhance its full-year yield guidance for the third time this year while also improving its cost projections, ultimately increasing revenue.

Carnival’s third-quarter revenue reached $7.90 billion, exceeding market estimates, with gross margin yields for the quarter rising by 19% compared to the same period last year. The company has also adjusted its 2024 profit per share expectation to $1.33, up from a previous forecast of $1.18, and raised its full-year net yield projection to 10.4%, slightly above earlier estimates.

Despite these positive developments, the company set a fourth-quarter earnings per share target of 5 cents, which fell short of analyst expectations of 7 cents, leading to a 2% drop in the company’s shares during early market trading.

Carnival, headquartered in Miami, Florida, projects an approximate 8% increase in adjusted cruise costs, excluding fuel, for the current quarter compared to last year. This rise is attributed to more maintenance days and increased advertising expenses.