Carnival, the world's largest cruise operator, said its fiscal first-quarter profit rose as strong growth in its European business offset weakness in the Caribbean cruise market.
Miami-based Carnival , which operates the Holland America, Cunard and Princess cruise lines, repeated its full-year profit forecast and said effects of the U.S. housing slowdown and subprime mortgage crisis on its customers were already factored in to the company's performance.
Carnival said quarterly net income rose to $283 million, or 35 cents a share, compared with $251 million, or 31 cents a share, in the same period a year ago.
Revenue rose 9% to $2.69 billion as the company increased capacity by 7%.
That was just ahead of Wall Street's average estimate of 34 cents a share profit, on revenue of $2.64 billion, according to Thomson Financial.
Demand for cruises in the Caribbean, traditionally a huge market for cruise operators, has been hurt by extensive hurricane damage in recent years. The region's softness has been somewhat offset by stronger demand for European and Alaskan cruises.
The company said that since early February it had seen a significant rise in booking volumes over the year before, well above its capacity increase for this year, especially for Caribbean trips, but warned that cruise prices are below last year's.
On a conference call with analysts, Carnival executives said the U.S. subprime mortgage crisis could "potentially have some impact" on its business, but had to some extent been factored in to its performance already.
In recent months, default rates in the riskier subprime segment of the U.S. mortgage market have jumped as the housing industry slowed, putting a squeeze on many consumers and posing a threat to the economy at large.
For the full year, Carnival repeated its profit forecast of $2.90 to $3.10 per share. Analysts are expecting $3.02, on average.
Concerns about the slowing U.S. economy and weakness in the Caribbean market have pressured Carnival's shares in recent weeks.