Updated version 3 - Carnival Corp raises annual profit forecast due to strong demand

Updated stock price information, added company comments in paragraph 5, added analyst comments in paragraphs 6 and 7

Sanskriti Shekhar

Reuters, September 29 - Cruise operator Carnival Corp (CCL.N) on Tuesday raised its annual earnings guidance and noted that bookings for 2027 have reached a record high, indicating that despite uncertainties in the geopolitical landscape, market demand remains strong. As a result, its share price surged nearly 12%.

Despite ongoing conflicts in the Middle East casting a shadow over economic prospects, the company continues to benefit from affluent travelers—who always prioritize experiences, especially journeys at sea and "bucket list" adventures.

Carnival is the only major U.S.-based cruise line that typically does not hedge fuel, and, thanks to stronger pricing power, lower operating costs, and improved fuel efficiency—which offset the impacts of rising fuel prices—the company raised its full-year profit target by more than $150 million compared to its June outlook.

The company now expects adjusted earnings per share for 2026 to be about $2.24, up from the prior estimate of $2.22.

Carnival said bookings for 2027 have already reached around half of capacity, with occupancy rates and ticket prices both hitting all-time highs, and 2028 bookings have had an "excellent start" as well.

{{skip_tag_0}} "While consumers have become more selective, they still put travel and experiences first," said Consumer Edge analyst Michael Gunther.

He added that older and wealthier travelers—who make up a large part of the customer base for the Princess Cruises and Holland America Line brands—could further boost demand.

Cruise operators are highly dependent on fuel oil and marine diesel. As the U.S.-Iran conflict continues to intensify and concerns mount over potential supply disruptions, these operators are facing an increasingly challenging business environment.

Most cruise companies have raised ticket prices while introducing affordable new attractions and activities to draw in more customers.

After Carnival's third-quarter results beat expectations, Royal Caribbean Cruises (RCL.N) shares climbed 6%, while Norwegian Cruise Line (NCLH.N) rose 5%.

According to data compiled by London Stock Exchange Group (LSEG), Carnival reported quarterly revenue of $8.44 billion for the period ending August 31, exceeding the analysts' average estimate of $8.30 billion.

Adjusted quarterly earnings per share were $1.43, also beating the analysts' average estimate of $1.36.

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