Carnival Raises Profit Forecast on Record Cruise Demand

Carnival Corp raised its annual profit forecast on Wednesday, anticipating a record year of bookings as the company benefits from a rise in people seeking cruise vacations for the first time.

Cruise operators are recording all-time high booking rates as more travelers switch to cheaper sea-borne experiences over expensive land-based alternatives such as booking hotels or flights, providing them more room to raise prices.

U.S.-listed shares of the company were flat in volatile trading. They have risen about 94% in the last 12 months.

"The first quarter has been fantastic across the board," CEO Josh Weinstein said on a post-earnings call. "We delivered record bookings and record customer deposits again this quarter, a great start to the year."

The company's first-quarter revenue jumped 22% to $5.41 billion, roughly in line with analysts' expectations.

Bookings for the rest of 2024 remain the best year on record with total customer deposits reaching $7 billion in the first quarter, the company said. New-to-cruise customers surged more than 30% year-over-year, Carnival said.

Adjusted cruise costs, excluding fuel in constant currency, were up 7.3% in the first quarter from a year earlier, but 2% lower than the company's forecast.

"Unlike prior quarters that were revenue-driven beats, it was cost line items that drove the first-quarter beat," Truist Securities analyst Patrick Scholes said in a note.

However, cost improvements of more than $250 million are being offset by the $130 million hit from re-routing ships in the Red Sea region, higher fuel prices, and currency exchange rates, CFO David Bernstein said.

The cruise operator raised the expected impact of the Red Sea disruptions to $0.09 per share from the $0.07 to $0.08 it had estimated in January.

Carnival also estimated an impact of up to $10 million on full-year adjusted EBITDA and adjusted net income following Baltimore's Francis Scott Key Bridge collapse on Tuesday.

The cruise operator now expects full-year adjusted profit per share of 98 cents, compared with its prior forecast of 93 cents. Analysts on average were expecting a profit of $1 per share, according to LSEG data.

Carnival posted an adjusted net loss per share of 14 cents, compared to analysts' expectations of 18 cents.

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(Reuters - Reporting by Granth Vanaik and Doyinsola Oladipo; Editing by Sriraj Kalluvila)