For the full year of 2008, Carnival expects its fuel expense to increase by $752 million compared to 2007, which reduces full year 2008 earnings by 92 cents per share.

The company, which operates Cunard and Princess cruise lines as well as its namesake Carnival line, now forecasts full year 2008 earnings of $2.70 to $2.80 per share compared to its previous guidance of $3.00 to $3.20.

Analysts had on average expected full-year earnings of $2.97, according to Reuters Estimates.

"The impact of skyrocketing fuel prices on our operating results has overshadowed the revenue yield improvement we have experienced," said Carnival's CEO Micky Arison in a statement.

Oil prices have roughly doubled in the past year.

Miami-based Carnival's net profit in its fiscal second quarter was $390 million, or 49 cents per share, compared to $390 million, or 48 cents per share, in the same period a year ago.

Analysts had on average expected quarterly earnings of 42 cents a share, according to Reuters Estimates.

Quarterly revenue was $3.4 billion compared to $2.9 billion in the same period a year ago.

Carnival said advance bookings for the next 12 months are in line with the prior year, with ticket prices at higher levels.

Arison said second quarter results were better than the forecast provided in March due primarily to stronger-than-expected revenue yields and lower than expected cruise costs.

"Our North American and European brands continue to perform well in the current difficult economic environment and we were pleased with our second quarter results. We enjoyed strong revenue growth supported by solid cost controls, however higher fuel prices cost the company $158 million, or $0.19 per share, during the quarter," Arison said.

(Reporting by Mark McSherry; Editing by Derek Caney)