Shares in Carnival PLC (LSE:CCL, NYSE:CCL), the owner of cruise companies such as P&O, rallied over 7% after it upgraded full-year profit guidance on the back of a strong second quarter.
Fueled by higher prices and robust demand for its cruise holidays in places such as the Caribbean and Alaska, the FTSE 250-listed group lifted its adjusted net income guidance by around US$275 million and its net yield guidance to 10.25% from the 9.5% indications it gave in March.
It means the cruise group now expects 2024 adjusted earnings per share of US$1.15, improving on forecasts of US$0.98 per share.
Third-quarter earnings per share are predicted to rise to US$1.15, ahead of Wall Street estimates of US$1.10.
Second-quarter revenues hit a record of $5.8 billion, helping pave the way for a record quarterly operating income of US$560 million and underlying earnings of US$1.2 billion.
Deposits hit $8.3 billion, sailing passed the previous record of $7.2 billion.
Long-term debt stood at $27.2 billion, down from $28.5 billion, with the company boasting that it prepaid $6.6 billion of debt over the last fifteen months while reducing secured debt by nearly 40%.
"We have made incredible strides in improving our commercial operations, strategically reallocating our portfolio composition and formulating growth plans, while strengthening even further our global team, the best in the business," said chief executive Josh Weinstein.
"Off the back of that effort, we closed yet another quarter delivering records, this time across revenues, operating income, customer deposits and booking levels, exceeding our guidance on every measure."
Analyst Derren Nathan at Hargreaves Lansdown said the second quarter results have come in ahead of expectations despite disruptions to routing in the Red Sea and the temporary closure of its Baltimore port.
He said net debt remains "stubbornly high" at $27.7 billion and with the second quarter typically being the strongest for cash generation "there may not be too much further movement this year".
"But the company is treading carefully in terms of new build ships which barring a stark deterioration in the economy or unforeseen event such as the COVID-19 pandemic, leaves it well positioned to manage capacity and get on top of its debt over the medium-term. The valuation remains well belong the long-term average so perhaps little surprise that the shares have seen a decent uplift on today’s positive news," Nathan said.
** Update: Adds analyst comment **