By Tess Stynes
Royal Caribbean Cruises Ltd.'s (RCL) swung to a second-quarter
profit as the cruise operator posted stronger revenue and a key
industry metric showed improvement, while the year-earlier loss was
due to derivatives impacts.
Shares were up 2.5% at $37.22 in premarket trading as adjusted
earnings were better than expected. Through Wednesday's close, the
stock is up 7% this year.
For the year, the company lowered its per-share earnings
estimate to $2.20 to $2.30 on growth of 2% to 3% in net yields--a
key industry metric measuring revenue per available cruise day.
Royal Caribbean previously had expected per-share profit of $2.30
to $2.50 and net yield growth of 2% to 4%.
For the current quarter, the company forecast per-share earnings
of $1.60 to $1.70, including a charge of five cents related to the
Grandeur of the Seas fire in late May. Analysts polled by Thomson
Reuters most recently expected $1.82.
Royal Caribbean has appeared to have received limited negative
impacts from negative publicity surrounding rival Carnival Corp.
(CCL), which has been hurt by some high-profile calamities at sea.
In January 2012, the Costa Concordia, a ship owned by a Carnival
subsidiary, was shipwrecked off Italy's coast, killing 32 people.
In February, an engine-room fire aboard the Carnival Triumph turned
into a public-relations disaster, leaving more than 3,000
passengers without functioning toilets for days in the Gulf of
Mexico.
Royal Caribbean, which operates its namesake line and Celebrity
cruises, reported a profit of $24.7 million, or 11 cents a share,
compared with a year-earlier loss of $3.7 million, or two cents a
share, a year earlier.
The latest period included five cents a share in charges related
to fire on its Grandeur of the Seas in late May. The period also
included a write-down of seven cents a share related to an
accounting correction linked to the company's credit-card program.
The year-earlier period included a mark-to-market loss of five
cents a share. Excluding items, adjusted earnings were 23 cents.
The company had forecast 10 cents to 15 cents.
Revenue increased 3.4% to $1.88 billion, slightly above
analysts' estimates for $1.86 billion.
Net yields rose 2.8%, in line with expectations for roughly 3%
growth.
Write to Tess Stynes at tess.stynes@wsj.com
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