Carnival Reports 32 Percent Drop In 2Q Profit

"The key takeaway from the quarter is that fundamental business conditions — the demand for cruise vacations at reasonable prices — has gotten better," wrote Robert LaFleur of Susquehanna Financial Group in a note to investors. "While we don't like to see earnings expectations move south, we are encouraged that the only reason they are doing so if for exogenous factors like the swine flu and higher oil prices."

Miami-based Carnival recorded a 32 percent drop in profit to $264 million, or 33 cents per share, in the quarter that ended May 31. That's down from $390 million, or 49 cents per share, a year ago.

Revenue tumbled 13 percent to $2.95 billion.

Analysts polled by Thomson Reuters expected a profit of 29 cents per share on revenue of $2.99 billion.

Arison attributed the company's performance to lower-than-anticipated cruise costs and gains in pricing.

Rising fuel costs, however, partly offset those improvements. Fuel prices, while still lower than last year's historic levels, has risen higher than analysts anticipated, driven in part by improving confidence in the economy.