Carnival earnings to focus on margins, fuel costs amid cruise travel boom
A surge in global oil prices, as well as higher labor and marketing costs, could eat further into profits for the world's biggest cruise line operator.
Carnival Corp (CCL) - Get Free Report shares moved higher in pre-market trading ahead of the cruise line operator's third quarter earnings expected before the opening bell.
Carnival is expected to swing to a profit of 75 cents per share over the three months ending in August, the group's fiscal third quarter, with revenues surging 55.5% from last year to $6.7 billion thanks to the ongoing boom in post-Covid travel that has supported airline traffic and rival cruise operators for much of the year.
The group's biggest input cost, however, is likely to pressure margins as the rise in global oil prices pushes Brent crude closer to the $100 mark while U.S. WTI crude tests the highest levels since November of last year.
Carnival cautioned in June that higher ticket prices may not offset the impact of risking marketing and labor costs, as well as fuel, telling investors that is forecast a full-year loss of between 8 cents and 20 cents per share.
That will leave investors to focus keenly on both the group's ticket price increases, as well as its onboard revenue increases for the third quarter.
Carnival shares were marked 2.4% higher in pre-market trading to indicate an opening bell price of $14.79 each.
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