Carnival rides on strong cruise demand, lower costs to lift profit outlook

(Reuters) -Carnival Corp raised its annual profit forecast for the third time on Monday and beat market expectations for third-quarter results, helped by strength in demand for cruise vacations as well as easing costs of operations.

Cruise operators benefit from increased demand for vacations at sea during the summer, boosting an already robust year for the companies as more travelers opt for the cruise experience.

“Strong demand enabled us to increase our full-year yield guidance for the third time this year, and we improved our cost guidance, driving more revenue to the bottom line,” Carnival (NYSE:CCL)’s CEO Josh Weinstein said in a statement.

Carnival’s third-quarter revenue of $7.90 billion surpassed estimates, while gross margin yields in the quarter grew 19% compared to the previous year.

The company raised its 2024 adjusted profit per share expectation to $1.33, up from the earlier forecast of $1.18.

Carnival also increased its full-year net yield projection to 10.4%, up from the estimates of 10.25% expected earlier.

However, the company’s target for fourth-quarter earnings per share of 5 cents was below analyst estimates of 7 cents. The cruise operator’s U.S.-listed shares were down 2% during early market trading.

The Miami, Florida-based company said it expects adjusted cruise costs, excluding fuel, to be up about 8% in the current quarter compared to last year due to more maintenance days and higher advertising spending.