Royal Caribbean Profit Plunges; Lifts Outlook

(RTTNews) - Royal Caribbean Cruises Ltd (RCL) on Thursday reported a steeper-than-expected decline in first-quarter profit, hurt mainly on lower revenues and margins. Looking ahead to the fiscal year 2014, the cruise operator lifted its adjusted earnings outlook by five cents.

There were some minor voyage disruptions during the quarter, but is expected to be offset during the rest of the year, the company said. Royal Caribbean's six voyages were either shortened or canceled.

The company said demand for European sailings from all key sourcing regions and for China sailings remained particularly strong throughout the quarter and double digit yield improvements are expected.

Miami, Florida-based Royal Caribbean posted quarterly net earnings of $26.5 million or $0.12 per share, compared with $76.2 million or $0.35 per share last year.

Excluding items, adjusted earnings for the quarter were $46.1 million or $0.21 per share. On average, 20 analysts polled by Thomson Reuters expected earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter declined to $1.89 billion from $1.91 billion in the prior year. Twenty analysts had a consensus revenue estimate of $1.89 billion for the quarter.

Net yields were down 2.7 percent, and net cruise costs excluding fuel increased 1 percent.

Available passenger cruise days, or APCD, for the quarter grew to 8.47 million from 8.43 million a year ago, while occupancy fell to 104.5 percent from 104.9 percent.

Cruise operating expenses for the quarter rose to $1.3 billion from $1.28 billion last year, and marketing and other costs climbed to $290 million from $274 million.

The company said its booking volumes for the past three months have been up about 16 percent year-over-year.

For the first quarter, Royal Caribbean expects adjusted earnings of $0.45 to $0.55 per share, while analysts currently project $0.46 per share.

For fiscal year 2014, Royal Caribbean now projects adjusted earnings of $3.25 to $3.45 per share, up from its prior guidance of $3.20 to $3.40 per share. Analysts currently expect earnings of $3.36 per share for the year.

The company said constant-currency net revenue yields and net cruise costs excluding fuel are likely to be consistent with its prior guidance of up 2 percent to 3 percent and flat to slightly down, respectively.

Based upon current ship orders, the company projects capital expenditures for 2014 of $1.3 billion and capacity increase of 1.7 percent.

The company's stock is trading at $51.82, down $0.81 or 1.54%, on a volume of 2.2 million shares on the NYSE.