Royal Caribbean: US Strength to Offset European Woes in 2013

Monday, 04 Feb 2013 09:57 AM

 

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Royal Caribbean Cruises, the world's second-largest cruise operator, on Monday said that strong U.S. demand and a jump in bookings so far this year would mitigate lingering weakness in Europe in 2013.

The cruise operator expects net yields, which reflect revenue from passenger tickets as well as what customers spend while on board, to be up between 2 percent and 4 percent, excluding currency fluctuations and anticipates 2013 earnings of $2.30 per share to $2.50 per share.

While revenue in the fourth quarter was a bit weaker than expected, Royal Caribbean said bookings in recent weeks were about 20 percent higher than a year earlier, when demand was severely dented after the Costa Concordia, a ship operated by Royal Caribbean's larger rival Carnival Corp & Plc, ran aground off the Italian coast, killing 32 people.

The company expects record yields on its Caribbean and Alaska itineraries to "more than offset" slow demand in Europe, where a weak economy, particularly on its Mediterranean rim, and lingering impact from the Costa Concordia have hurt sales.

"Looking forward, we see a tale of two continents; North America is doing well, while parts of Europe continue to be a challenge," Chief Executive Richard Fain said in a statement.

Royal Caribbean reported a fourth-quarter net loss of $392.8 million, or $1.80 per share, on revenue of $1.81 billion, compared with a profit of $36.6 million, or 17 cents per share, on revenue of $1.78 billion a year earlier.

The loss stemmed from a $413.9 million impairment charge related to its Spanish cruise line Pullmantur, which has been hit by austerity measures in that country.

Excluding that, Royal Caribbean reported a profit of 10 cents, beating Wall Street estimates by 4 cents, according to Thomson Reuters I/B/E/S/.

In December, Carnival gave a weak 2013 forecast that suggested the cruise industry was not recovering as quickly from the disaster as previously hoped following the disaster.

Shares in both companies were up 1 percent in premarket trading.

© 2014 Thomson/Reuters. All rights reserved.

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