Should your portfolio book a cruise with Carnival?

Famous cruise line entity Carnival Corp. (NYSE: CCL), which competes with Royal Caribbean (NYSE: RCL) and The Walt Disney Company's (NYSE: DIS) vacation voyages, reported earnings for the third quarter on Thursday. The company held up well during the summer months. Revenues increased 11% to $4.8 billion. Earnings per diluted share did decrease slightly from a year ago, dropping two pennies to $1.65. But management reported that the number was better than expected because of lower costs and the positive effect of an insurance recovery. As far as Wall Street estimates were concerned, the bottom line beat by a wide margin. This item says that Carnival bested estimates by $0.07.

Another cool thing is that Carnival narrowed its fiscal-year guidance in a most positive way. Before, the company expected that it would book earnings somewhere between $2.70 and $2.80 per share. Well, now management thinks it'll do between $2.79 and $2.81. That shows confidence in the business, and it looks like the market is pretty happy with the results. Taking a look at the stock at the time of this writing, I see that is up almost 3%, and that volume is decent so far.

I personally would not buy Carnival at this time, however, even though there are some sound elements to this story. It does sport a very good dividend yield of 4%, but it's not close to the 52-week low, and one could argue that the upgraded guidance is confirmation that the stock could be a buy. Still, the market is volatile, the economy is questionable, and energy prices remain a concern. Plus, the earnings release did note some weakness in occupancy levels for advance bookings. I'd be fearful of looking at Carnival before a pullback brings the stock in a little. Long term, though, I do think the company will prosper, since I think it is a great brand in the leisure business.

Disclosure: I own Disney; positions can change at any time.