Carnival Trims Profit Outlook Amid Rising Fuel Expenses

Carnival has lowered its full-year profit forecast due to increased fuel costs, though the cruise operator noted that record bookings and strong demand are helping to mitigate the impact. The company announced on Friday that it now expects full-year adjusted earnings per share of $2.21, down from its previous projection of $2.48. Analysts surveyed by FactSet had anticipated earnings per share of $2.35. Rising fuel prices have had an adverse effect of more than $500 million compared to earlier forecasts, driven by a sharp increase in Brent crude futures. This surge is linked to disruptions in shipping through the Strait of Hormuz due to escalating Middle East conflicts, as well as production cuts by some Gulf oil producers. Carnival stated that operational improvements of approximately $150 million will partially offset the pressure from higher fuel expenses, benefiting from increased ticket prices and stringent cost controls. The company expects adjusted earnings per share of 34 cents for the current quarter, below analysts' expectations of 38 cents. Shortly after market opening, Carnival's stock fell 3.0% to $24.54. Over the past three months, the company's market value has declined by about one-fifth, although it has risen 24% over the past year. The chief executive emphasized the company's resilience, pointing out that 2026 cruise bookings have shown double-digit growth even with historically high ticket prices, and approximately 85% of voyages have already been sold. He noted that customer deposits reached a record of nearly $8 billion in the first quarter, with onboard spending accelerating, underscoring robust demand across the cruise business. In the three months ended February 28, the company reported a profit of $258 million, or 19 cents per share, compared to a loss of $78 million, or 6 cents per share, in the same period last year. Excluding one-time items, earnings per share were 20 cents, exceeding analysts' expectations of adjusted earnings per share of 18 cents. Revenue increased by 6.1% to $6.17 billion, slightly above Wall Street's forecast of $6.14 billion.