Royal Caribbean climbs back to 2nd-quarter profit on higher revenue; boosts full-year outlook

Royal Caribbean returns to profit, lifts outlook

MIAMI — Cruise ship operator Royal Caribbean Cruises Ltd. said Thursday that it returned to a profit in the second quarter as revenue climbed, costs fell and the company made more money on each cabin filled by travelers.

“What a difference a year makes,” Chairman and CEO Richard D. Fain said in a statement. “Despite ongoing uncertainty with the economy, our profitability continues to improve and our booking environment continues to be remarkably stable.”

The good news, combined with an increased full-year profit forecast, sent shares up 9 percent in morning trading.

For the three months ended June 30, Royal Caribbean reported net income of $60.5 million, or 28 cents per share. That’s up from a loss of $35.1 million, or 16 cents per share, in the year-ago period.

Revenue climbed more than 18 percent to $1.60 billion from 1.35 billion last year. Net yield, an important industry measure that compares revenue to the available ship occupancy each day, climbed 4.9 percent despite the impact of the stronger U.S. dollar.

Meanwhile, total cruise costs fell 2.78 percent. Excluding the cost of fuel, that measure slipped 4.4 percent.

Analysts surveyed by Thomson Reuters expected the Miami-based company to earn 18 cents per share on revenue of $1.62 billion.

Also Thursday, Royal Caribbean said it expects to earn between $1.52 and $1.57 per share in its third quarter. And it raised its full-year profit forecast to a range of $2.25 to $2.35 per share from prior estimates of $2.15 to $2.25 per share. The company said business conditions have remained on target in each of its main markets.

“Demand for our cruises remains on track with our earlier projections,” said Chief Financial Officer Brian J. Rice. “The strengthening of the U.S. dollar will clearly result in a reduction of our reported yields, but also provides a corresponding reduction in expenses. Most importantly, our continued focus on cost controls and efficiency is driving improved earnings.”

Net yields are expected to increase approximately 4 percent in the third quarter and 3 percent to 4 percent for the year as a whole.

Analysts, on average, expect a third-quarter profit of $1.52 per share and a full-year profit of $1.91 per share.

Royal Caribbean shares climbed $2.20 to $26.78 in morning trading.