(Reuters) – Carnival Corp raised its full-year profit forecast on Wednesday, betting on record demand for cruise vacations as well as rising prices.
Cruise lines are now facing record booking levels as travelers switch to cheaper ocean travel instead of expensive land-based alternatives such as hotel or airfare bookings, allowing operators to raise prices.
However, shares of the company, which owns US-listed cruise lines Cunard and Holland America Line, reversed course and were last down about 3% in early trading. They are up about 94% over the past 12 months.
“It’s been a fantastic start to the year,” CEO Josh Weinstein said in a statement.
“We delivered another strong quarter, exceeding forecasts across all metrics, and completed a monumental wave season that saw record-high order volumes at significantly higher prices.”
The company’s first-quarter revenue rose to $5.41 billion, roughly in line with analysts’ expectations, according to LSEG.
Bookings for the remainder of 2024 remain its best year on record, with total customer deposits reaching a record high of $7 billion in the first quarter, the company said.
To attract more bookings, companies also offered special offers and discounts during the crucial wave season – January to March – on their tickets and itineraries for the year.
In January, Carnival (NYSE:) said the first half of 2024 was almost fully booked, adding that strong demand trends throughout the year were expected to offset the impact it was seeing from ship reroutings in the Red Sea region.
The cruise operator now expects adjusted earnings per share to be 98 cents in 2024, up from a previous forecast of 93 cents. Analysts on average expected earnings of $1 per share, according to LSEG.