Carnival Corp, the world’s largest cruise operator, reported a better-than-expected quarterly profit on Tuesday and raised its forecast for full-year earnings, sending its shares to a record high.
Cruise operators such as Carnival, Royal Caribbean Cruises Ltd and Norwegian Cruise Line Holdings Ltd have benefited in recent years as more consumers seek experiences such as travel and fine dining.
Increase in cruise travel is expected to continue this year, with an estimated 25.3 million passengers expected to sail in 2017, compared to 15.8 million a decade ago, according to Cruise Lines International Association, an industry trade body.
Carnival, which operates the Costa and Princess cruise lines, hiked ticket prices last year in response to growing demand from Asia and for cruises to Alaska and the Caribbean.
“At this time, cumulative advance bookings for the remainder of 2017 are well ahead of the prior year at considerably higher prices,” Carnival said in a statement.
The company now expects adjusted earnings for the year ending November to range between $3.50 and $3.70 per share, up from a prior forecast of $3.30 to $3.60 per share.
Analysts on average were expecting $3.61 per share, according to Thomson Reuters I/B/E/S.
Carnival also raised its forecast for net revenue yields, a keenly watched metric that measures spending per available berth. It now expects full-year yields to rise about 3 percent on constant currency terms, compared to a prior forecast of a 2.5 percent increase.
On-board spending, which makes up about a quarter of Carnival’s total revenue, grew 6 percent in the first quarter ended Feb. 28, as the company added more entertainment options such as casinos and IMAX theaters to its cruises.
Net revenue yields climbed 3.4 percent in the first quarter on a constant currency basis.
Carnival’s net income rose to $352 million or 48 cents per share in the quarter, from $142 million or 18 cents per share, a year earlier.
Excluding one-time items, Carnival earned 38 cents per share, topping analysts’ average estimate of 35 cents per share.
Revenue rose 3.8 percent to $3.79 billion. Analysts on average had expected $3.78 billion.
Carnival’s shares were up 1.5 percent at $59.73 in morning trading on the New York Stock Exchange. The stock hit a record high of $60.24 earlier.
Shares of Royal Caribbean, the No. 2 U.S. cruise operator, were up 1 percent.