Royal Caribbean raises forecast as cruise demand revives in Europe
(Reuters) - Royal Caribbean Cruises Ltd raised its full-year earnings forecast due to greater demand in Europe and said bookings for 2014 were trending higher, signalling a revival in an industry hit by negative publicity from a series of mishaps.
Shares of the world's second-largest cruise operator rose 6 percent in Thursday morning trading after the company reported quarterly results that beat Wall Street estimates.
Larger rival Carnival Corp's stock rose about 3 percent.
Royal Caribbean, the second-largest cruise operator in the world, said it had higher bookings for 2014 in most markets including Europe, Asia and Alaska.
The company's strong results come after Carnival warned in September that it might report an adjusted loss for the fourth quarter, following a 30 percent fall in third-quarter profit.
Headline-grabbing accidents over the past couple of years, such as the sinking of the Costa Concordia off the coast of Italy, have hurt demand in the cruise industry. Earlier this month, a six-year-old boy drowned in a pool aboard a ship operated by Carnival.
While the incidents aboard Royal Caribbean ships have not been as serious, the company has been forced to cut prices to revive demand.
The company said prices for the first quarter of 2014 remained steady from a year earlier and trended higher for the following quarters.
Pricing in the Caribbean, however, remained under pressure, and advance bookings were weaker, the company said.
Royal Caribbean raised its full-year adjusted earnings forecast to $2.30-$2.35 per share from $2.20-$2.30 per share.
Analysts on average were expecting $2.28 per share, according to Thomson Reuters I/B/E/S.
The company said it expected net yields, a measure of ticket sales and money spent onboard, to rise about 3 percent in 2013. Net yields rose 2.6 percent in the third quarter ended September 30, excluding currency fluctuations.
The company's net income fell slightly to $365.7 million, or $1.65 per share, in the quarter from $367.8 million, or $1.68 per share, a year earlier.
Royal Caribbean earned $1.71 per share on an adjusted basis, higher than the average analyst estimate of $1.65.
Total revenue rose 3.5 percent to $2.31 billion, beating average analyst estimate of $2.26 billion due to last-minute bookings in Europe and Asia and increased spending aboard its ships.
Royal Caribbean's share was up at $42.19 on the New York Stock Exchange. Carnival stock rose to $34.79.
(Reporting by Chris Peters and Devika Krishna Kumar; Editing by Sriraj Kalluvila and Kirti Pandey)
