By Anuja Bharat Mistry
(Reuters) -Cruise operator Carnival (NYSE:CCL) Corp forecast strong bookings for 2025 ahead of the busy summer travel season, riding the wave of strong spending on experiences even as prices increase, sending its shares up about 5% on Friday.
The resilient demand for cruise vacations also helped Carnival post better-than-expected profit and sales for the fourth quarter, but the company forecast annual profit below estimates due to rising input costs and advertising spending.
Adjusted cruise costs, excluding fuel, for the quarter increased 7.4% from 2023 but were better than the firm’s projections of about 8%, announced in September.
“2025 is shaping up to be another banner year, with yield growth expected to far outpace historical growth rates and again exceed unit cost growth,” CEO Josh Weinstein said in a statement.
On a constant currency basis, Carnival’s cumulative advanced booked position for next year is at an all-time high for occupancy and price, with both surpassing 2024 in all four quarters of 2025.
The Miami, Florida-based company reported quarterly revenue of $5.94 billion, compared with analysts’ estimates of $5.93 billion, per data compiled by LSEG.
Its adjusted profit for the quarter was 14 cents per share, above estimates of 8 cents.
Still, the company projected annual profit to be $1.70 per share, below estimates of $1.74.
Carnival, like peers Royal Caribbean (NYSE:RCL) and Norwegian Cruise Line (NYSE:NCLH) Holdings, has been investing in private-island destinations, seeking to attract young voyagers and boost returns.
Operating costs associated with these investments, maintenance costs due to increased dry dock days and expenses from the deal-heavy wave season weighed on the profit forecast.
“Cruise lines have historically started the year on the conservative side with their guides given the various global uncertainties,” said Patrick Scholes, analyst with Truist Securities.
He expects to see opportunity for quarterly earnings beats and raises.
