Carnival tests June highs

A return to popularity looks set to take Carnival back towards its highs for the year.

Carnival ship
Source: Bloomberg

Carnival is set to release third-quarter figures on Tuesday 23 September, when adjusted earnings-per-share are expected to come in at $1.432. Sales are set to rise from $3.633 billion up to $4.932 billion. The third quarter is also expected to see the company post pre-tax profits of $1.124 billion.

The first of the driving reasons why the shares have performed well has been the resurgence in demand for cruise holidays; both current and future bookings have increased, meaning companies such as Carnival are already seeing good figures for their 2015 books. There is a geographical bent on this improving demand, leaning towards European cruises rather than the Caribbean. A perceived greater value to tourists cruising around the Mediterranean, due to the strength of the US dollar against the euro, could well a key contributor here.

The other major area of improvement here is cost, as weak oil prices have helped keep the running costs of ships under control.

The success of companies such as Saga has highlighted the shifting age demographics of tourists, as the target market has expanded. With P&O covering the middle market and Cunard covering the premium clients, Carnival is well placed for continuing growth. 

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