MIAMI, Florida: Strong demand for cruise vacations is helping Carnival Corp sail past earnings expectations and lift its annual profit forecast, even as the company cautions that global economic volatility could still rock the waters ahead.

On Friday, the Miami-based cruise operator projected full-year adjusted earnings of about US$1.83 per share, up from its earlier estimate of $1.70, thanks to record bookings and onboard spending. Carnival also expects occupancy rates in 2025 to remain in line with last year's highs.

Still, CEO Josh Weinstein struck a cautious tone during a post-earnings call, pointing to growing geopolitical and economic risks that could impact consumer behavior.

"Even with our resilience and strong visibility... we aren't taking the current backdrop lightly," Weinstein said.

Recent trade tensions and U.S. President Donald Trump's tariff policies have sparked concerns that rising inflation could eventually weigh on discretionary spending, including travel.

Carnival forecast a second-quarter adjusted profit of 22 cents per share, just below the average analyst estimate of 23 cents, according to LSEG data. The company's shares dipped two percent in early trading following the announcement.

Smaller cruise operator Viking Holdings recently noted weaker revenue trends in February, echoing broader macroeconomic headwinds. Travel group AAA also predicted earlier this year that cruise travel growth would slow following the post-pandemic rebound.

Despite that, Carnival appears to be benefiting from the continued appetite for premium vacations and on-board splurges, helping offset potential risks on the horizon.

For the first quarter ending February 28, Carnival posted an adjusted profit of 13 cents per share, handily beating Wall Street's projection of 2 cents. Revenue for the quarter came in at $5.81 billion, topping the average analyst forecast of $5.75 billion.

Carnival, which operates brands including Princess Cruises, Holland America Line, and Costa Cruises, has seen a steady recovery in bookings since pandemic-era restrictions eased. While inflation and tariff-related uncertainty remain factors to watch, the company's near-term outlook remains upbeat.

Weinstein reaffirmed Carnival's confidence in its business model but acknowledged that external pressures could affect consumer spending decisions in the future.

As the industry adapts to shifting economic tides, Carnival's strong first-quarter performance suggests that, for now, vacationers are still ready to cruise.