Royal Caribbean Profit Jumps on Higher European Demand

Posted by Eric Haun
Thursday, July 24, 2014
Oasis of the Seas (Photo courtesy of Royal Caribbean International)

Royal Caribbean Cruises Ltd's quarterly profit beat analysts' average estimate as demand for its European and Chinese cruises increased and passengers spent more on board, helping it raise its full-year profit forecast.

Shares of the world's second-largest cruise operator rose as much as 9.1 percent to a life-high of $61.35.

European cruises account for 22 percent of the capacity in the company, whose cruise lines include Royal Caribbean International, Celebrity Cruises and Azamara Club Cruise.

The company raised its full-year earnings forecast to $3.40-$3.50 per share, from $3.25-$3.45.

Royal Caribbean, which in April warned of pricing pressure in its biggest market, the Caribbean, said the environment in the region remained "promotional".

The promotional environment is said to be led by Europe-based MSC Cruises, which is offering seven-night Caribbean cruises for as low as $199.

Larger rival Carnival Corp last month forecast an adjusted profit below market estimates for the current quarter, blaming increased competition in the Caribbean.

Royal Caribbean and Carnival have been bogged down for two years by a series of adverse events such as virus outbreaks and engine fires.

Royal Caribbean is set to launch its ship, Quantum of the Seas, which features simulated skydiving, bumper cars and roller skating.

The ship, poised to make its debut in November, is already seeing "extremely strong bookings", Chief Executive Richard Fain told Reuters.

"I don't think we've ever had a new ship where the early bookings have been so powerful," he said.

Royal Caribbean would also double its capacity in China from about 6 percent, Fain said.

"They're extremely confident in their numbers and this is minimal risk. They're going to get a strong return, there's no doubt about it," industry analyst Stewart Chiron said about the company's expansion plans in China.

PROFIT BEATS ESTIMATES

Royal Caribbean said net yields, which include ticket sales and spending on board, rose 2.6 percent in the second quarter ended June 30, excluding the impact of currency fluctuations.

"Double-digit yield improvement on European and China sailings is helping offset a continued promotional environment in the Caribbean," the company said on Thursday. [ID:nPn5QjnVl

The company's net income rose to $137.7 million, or 62 cents per share, more than five times the $24.7 million, or 11 cents per share, it reported a year earlier.

Excluding items, the company earned 66 cents per share.

Total revenue rose 5 percent to $1.98 billion.

Analysts on average had expected earnings of 52 cents per share on revenue of $1.99 billion, according to Thomson Reuters I/B/E/S.

Royal Caribbean shares were up 8.3 percent at $60.91 on the New York Stock Exchange in afternoon trading.

(Reporting by Devika Krishna Kumar in Bangalore; Editing by Savio D'Souza and Maju Samuel)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Pirates Switch to Kidnapping Crew as Oil Fetches Less

Pirate gangs in West Africa are switching to kidnapping sailors and demanding ransom rather than stealing oil cargoes as low oil prices have made crude harder to sell and less profitable,

Baltic Index Down for Third Straight Session

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, fell on Tuesday for the third straight session, as demand for bigger vessels weakened.

Kongsberg, DNV GL Partner to Reduce Training Costs

Kongsberg Maritime has entered a partnership with class society DNV GL to issue Product Certificates for Maritime Simulator Systems required by maritime training

Passenger Vessels

Ferry Drydocking Completed on 2-day Turnaround

Great Lakes Shipyard hauled out the Kelleys Island Ferry Kayla Marie on April 18 for its USCG five-year inspection survey. The yard completed all work, and refloated the vessel two days later,

113 Migrants Drown in Libya-Italy Weekend Transits

An estimated 113 people died in four shipwrecks between Libya and Italy at the weekend as the crossing becomes the preferred sea route for migrants to Europe, the

Stomach Bug on Disney Cruise

An outbreak of gastrointestinal illness occurred aboard the the Disney Cruise Line ship the Disney Wonder last week, and more than 100 people have become sick,

News

Libya Eastern Oil Company Blocks Tanker Loading Crude for Tripoli Rival

An oil company set up by Libya's eastern government is preventing a tanker from loading a cargo for its Tripoli rival, the National Oil Corporation (NOC), officials said on Tuesday.

CRMG Cranes Arrive in Mersey for Liverpool2

First six of 22 to be installed at £300m terminal; arrival marks end of 13,730 mile (11,930nm) journey from Nantong, China   The first six cantilever rail-mounted

UN to Start Inspecting Commercial Shipments to Yemen

The United Nations will start inspecting shipments to rebel-held ports in Yemen in a bid to boost commercial imports and enforce an arms embargo, the world body said on Tuesday,

 
 
Maritime Standards Naval Architecture Offshore Oil Pipelines Port Authority Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1279 sec (8 req/sec)