Carnival Corp & Plc posted a quarterly profit that beat analysts' estimates helped by better-than-anticipated pricing and lower net cruise costs, driving shares up nearly 9 percent in midday trading.

The world's largest cruise operator reported net income of $264 million, or 33 cents a share, in the second quarter compared with $390 million, or 49 cents a share, a year ago.

The earnings beat consensus estimates of 28 cents per share, according to Reuters Estimates. They were also better than the Miami-based company previously forecast in April when it reassessed its estimates to reflect the H1N1 flu outbreak.

Total revenue for the quarter was $2.9 billion, down about 15 percent from a year ago.

What is very encouraging is that, since the end of March, everything is trending up right through the travel advisory, both volumes and yields, Carnival Chief Executive Micky Arison said during a conference call with analysts.

So we're encouraged by that. Whether that will be sustainable, time will tell.

Carnival shares were up $2.07 at $25.12 at midday on the New York Stock Exchange. The shares of Rival Royal Caribbean Ltd jumped 6 percent, or 77 cents, to $13.31.

Including fuel, net cruise costs dropped 9.6 percent on a constant dollar basis. Carnival said on Thursday that booking volumes for the second half of 2009 so far were 26 percent higher than in 2008. Costs and expenses were down nearly 13 percent compared with a year earlier

OUTLOOK

Carnival lowered its third-quarter and full-year outlook, largely due to higher fuel costs and currency exchange rates. Carnival now see third-quarter earnings within the $1.15 and $1.19 range. The company also lowered its 2009 earnings outlook to a range between $2 and $2.10. Analysts expect Carnival to finish the year with $2.08 in earnings, Reuters Estimates shows.

They didn't change their outlook for revenue yields, so they're still being cautious, said Robin Diedrich, an analyst for Edward Jones. The demand is still kind of bouncing along these lower levels, but starting to see some pick-up.

Carnival said it could see yield declines as late as the first quarter 2010, largely due to difficult year-over-year comparisons. Most bookings during the first quarter of this year were made prior to Lehman Brothers Holdings Inc bankruptcy in September.

The results of cruise operators have been pressured by higher fuel prices and an international flu pandemic. Carnival estimates the flu hurt its second-quarter results by 3 cents a share.

Despite the improvements in bookings and costs, prices were still down across all markets, the company said, although European tickets did not drop as much as expected.

Overall, they're holding their costs pretty well in the second quarter, Diedrich said. Bookings volumes are running better than last year and some markets seem to be stabilizing.

The company said it completed its financing needs for 2009 and was on track to complete them through September 2010. Arison said he would like to see earnings turn around before the company considers reinstating its dividend.

(Reporting by Deepa Seetharaman; editing by Dave Zimmerman and Andre Grenon)

#carnival