Despite several negative news events over the past few years, the cruise line industry is proving to be quite resilient. Cruise lines continue to attract a record number of passengers each year, who seem to have deep pockets when it comes to spending on activities while on board.

For these reasons, and others, you should consider some of the players in this space of the leisure industry if you are in search of strong growth stocks.

The lines that dominate the cruise industry include Carnival Cruise Lines (NYSE: CCL), Royal Caribbean (NYSE: RCL) and Norwegian Cruise Lines Holdings (NASDAQ: NCLH). The latest quarterly earnings reports they have posted for fiscal 2016 indicate that they are well-positioned to weather the sometimes volatile nature of the cruise line business and maintain strong balance sheets.

Each of them has upwardly revised their full-year guidance for 2016, and observers note that this year is shaping up to be a banner year like last year.
 

 · Reasons for growth

 
According to Barron’s, cruise lines will see revenue gains of at least 20% this year. That’s partly due to the uptick in global demand. Specifically, in China, the country’s wealthiest are flocking to cruise ships.

The Cruise Line International Association expects 24 million passengers to sail this year. That’s up from the 10 million passengers that sailed 10 years ago.
Cruise lines are also enjoying lower fuel costs, which is significant as the lines continue to roll out larger vessels. Royal Caribbean already boasts having the world’s largest ship, and it just announced that another ship of the same, or larger, size will be on line in 2021.

Cruisers know that the low rates they may have received for booking their trips will likely be mitigated by the myriad expenses they will have to pay for their onboard activities. For example, although many food services may be free, passengers may have to pay for some restaurants. This is part of the cruise line industry’s effort to bump up the meal options onboard the ships.
 

 · Strong earnings

 
Cruise lines did well during the last quarter, with most of them beating analysts’ estimates. Norwegian, which is the smallest of the three noted in this story, were up roughly 48% on a year over year basis. Net income was $73.2 million, or $0.32 per share compared to a loss of $21.5 million or $.10 per share in the prior year.

Norwegian raised its full year guidance for 2016. It sees earnings now being between $3.65 and $3.85 versus previous guidance of between $2.80 and $2.90.

Royal Caribbean rolled out a plan in 2014 to meet aggressive revenue targets, and so far it is on path to meet them. Called double double, the company’s chief executive said the initiative “sets demanding, but realistic targets” that give the plan its name: double the company’s 2014 earnings per share by 2017 and increase return on invested capital to double digits.

So, during the last quarter, adjusted net income was $124 million or $.57 per share, versus $45.2 million, or $.20 per share in 2015. The company increased its full year earnings guidance by $.25 per share. It now ranges from $6.15 to $6.35, which, compared to 2015, would be an increase of 27% to 32%. Some analysts say the earnings could reach at least $7.20 per share next year.

Royal Caribbean continues to implement its $500 million share repurchase program. Since the program was announced in October 2015, the company has repurchased $450 million worth of shares.

Lastly, there’s Carnival. As a reflection of its positive financials, Carnival received an upgrade to some of its debt by Moody’s Investors Service. The ratings agency said the upgrade acknowledges Carnival’s continued strong earnings growth, which has led to its operating margins reaching the levels it maintained prior to the 2012 and 2013 ship incidents when people onboard became ill.

During the last quarter, Carnival’s income was $301 million, or $.39 a share. That compares to income of $159 million during the first quarter of 2015, or $.20 a share. Revenues for the first quarter of 2016 were $3.7 billion compared to $3.5 billion in the prior year.

Carnival raised its full year guidance to between $3.20 and $3.40 a share. The previous outlook was between $3.10 and $3.40 a share.
 

 · Carnival’s earnings

 
The earnings growth of these cruise lines is expected to remain strong as more people board due to the larger vessels coming on line. Low fuel prices and competitive pricing will play a role in the company’s maintaining strong balance sheets.