June 23 (Reuters) - Carnival Corp on Tuesday forecast third-quarter profit below estimates as elevated fuel costs and geopolitical tensions continued to squeeze margins, sending its shares down about 8% in early trading.
Cruise operators, heavily reliant on fuel oil and marine gas oil, have been grappling with a tougher operating environment after the Middle East conflict heightened concerns over prolonged supply disruptions.
Carnival also posted weaker-than-expected second-quarter revenue and said
that geopolitical volatility weighed on bookings, particularly for European itineraries in the Mediterranean, which were closest to the conflict.
Carnival - the only major U.S. cruise operator that typically does not hedge fuel - said it was "overcoming extreme geopolitical headwinds and nearly 30 percent higher fuel costs" during the quarter.
Its revenue of $6.66 billion for the quarter ended May 31 came in below estimates of $6.69 billion.
However, Carnival said its booking position for the second half of the year was higher than last year, helped by strong demand from wealthier travelers.
"We are now 93 percent booked for the year with less inventory remaining for sale than this time last year and are on track for record net yields in the second half of 2026," said CEO Josh Weinstein.
The company expects quarterly adjusted earnings per share to be about $1.35, compared with analysts' estimates of $1.42, according to data compiled by LSEG.
It forecast annual adjusted cruise costs, excluding fuel, to be about 2.4% on a constant currency basis, compared with its prior projection of 3.1%.
Shares of peers Royal Caribbean and Norwegian Cruise Line Holdings, which also flagged pressures from fuel costs during their first-quarter reports, were down about 5% and 2%, respectively.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Maju Samuel)
