Carnival buoyed as Royal Caribbean reiterates targets

Cruise operator Carnival rose three per cent in afternoon trade on Thursday, making it the top riser among FTSE 100 stocks, buoyed by news that its US rival Royal Caribbean has raised its full-year forecast.

Royal Caribbean now expects 2012 earnings of $1.85 to $1.95 per share, 15 cents higher than its previous target range.

The cruise industry was hit hard earlier in the year after one of Carnival's own ships, the Costa Concordia, grounded off the coast of Italy, killing dozens of passengers and crew.

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Carnival had to cut prices to get people back on board with the idea of cruise holidays after the disaster back in January. The hope must be that this is now water under the bridge.

Royal Caribbean said that the effect of that accident "has continued to wane" and that bookings in the third quarter were stronger than it had expected, even in Europe, where news of the Costa Concordia accident drifted around for months.

On September 25th, Carnival posted a year-on-year decline in net revenue yields for the third quarter to the end of August despite continuing strength in fleetwide booking volumes and pricing trends since June.