With the devastating images of Hurricane Katrina indelibly etched in many people's minds, it would be understandable if some cruise vacationers suddenly decided to change their travel itineraries. And for those seafaring adventurers who have refused to cancel their plans, it seems as if Mother Nature may do it for them. Hurricane Philippe is currently churning up water in the Atlantic basin and lumbering north. Then there's newly formed Tropical Storm Rita, which is threatening to strengthen as it charges through the Florida Keys and bears down on the northwestern Gulf Coast.

For now, Carnival Cruise Lines (NYSE:CCL) is only, in the immortal words of Jimmy Buffet, "trying to reason with hurricane season." Thus far, though, the world's largest cruise operator has escaped with minimal financial impact. This morning, the company posted record third-quarter net income of $1.15 billion and announced that advance fourth-quarter booking levels are running at an even faster pace than last year's.

Earnings for the quarter jumped 11% to $1.36 per share, in line with expectations, and would have been even stronger without a $23 million charge related to the British Merchant Navy Officer Pension Fund. The unfunded pension liability is a remnant of the P&O Princess line, which was absorbed in a 2003 acquisition.

Revenues also climbed 11% to $3.6 billion, fueled by a solid 6.2% increase in net revenue yields -- a function of ticket prices, onboard revenues, and occupancy. All three measures showed improvement, but they fell just short of allowing Carnival to extend its streak of 7%-plus net revenue yields to a sixth straight quarter. Unlike last quarter, though, the gain in net revenue yield was not quite enough to keep pace with rising expenses. Net costs-per-available-lower-berth day (ALBD) jumped 7.4%, although the increase would have been a tamer 1.4% without the previously mentioned pension bill and rising fuel costs.

Unfortunately, soaring fuel costs cannot simply be dismissed as a temporary aberration. Fuel is expected to ring up at $308 per ton this quarter -- a 44% year-over-year increase -- and represent around 6% of Carnival's revenues; it accounts for an even heavier 7.3% at rival Royal Caribbean (NYSE:RCL). Rising prices at the pump are expected to cost Carnival an extra $170 million this year, weighing down earnings by $0.20 per share. Management is forecasting that number to rise to $200 million in fiscal 2006.

Carnival continues to expand its capacity, though, and is having little trouble finding the passengers to fill it. After a 17% increase last year, the company's available lower-berth days (which is a calculation based on total berths of 137,000, double occupancy, and the number of cruising days in the period) increased 5.2% during the quarter to reach 12.3 million. Furthermore, each of those ALBD's generated gross revenues of $274 per day, resulting in total cruise revenues of $3.3 billion. Now, consider that Carnival is expecting the delivery of 12 new ships over the next three years.

With fixed costs spread over a larger fleet, ticket prices marching ever higher, visitors dishing out more for onboard amenities, and advance bookings reflecting strengthening demand, it comes as little surprise that the company's earnings are expected to sail along at a brisk 20% clip for the foreseeable future.

Fool contributor Nathan Slaughter owns none of the companies mentioned.