Royal Caribbean Q3 Profit Beats View, But Outlook Disappoints

(RTTNews) - Royal Caribbean Cruises Ltd. (RCL) Thursday reported a 34 percent increase in profit for the third quarter from last year on higher revenues and lower expenses. Adjusted earnings per share for the quarter beat analysts' expectations.

Looking ahead, the cruise operator forecast earnings for the fourth quarter and fiscal 2014 below Street estimates.

Miami, Florida-based Royal Caribbean posted third-quarter net income of $490.25 million or $2.19 per share, up from $365.70 million or $1.65 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $492.9 million or $2.20 per share, compared to $377 million or $1.71 per share in the year-ago period.

On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $2.19 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter rose 3 percent to $2.39 billion from $2.31 billion in the same period last year. Analysts were looking for revenue of $2.40 billion for the quarter.

Royal Caribbean noted that bookings since July have been solid and the company continues to be booked ahead of last year.

Double-digit yield improvements on Europe and China sailings continued to offset the continuation of a highly promotional Caribbean environment, the company said.

Net yields on a constant-currency basis increased 4.2 percent during the quarter. On an as-reported basis, net yields increased 4.9 percent.

The company noted that onboard and other revenue drove the increase, particularly in Europe and Alaska, with onboard revenue yields increasing 4.4 percent during the quarter.

Constant-currency net cruise costs, excluding fuel, decreased 1.2 percent in the quarter, mainly due to timing.

Looking ahead to the fourth quarter, Royal Caribbean forecasts adjusted earnings in a range of $0.35 to $0.40 per share. Street expects the company to report earnings of $0.46 per share for the quarter.

For fiscal year 2014, the company now forecasts adjusted earnings of about $3.45 per share, compared to the prior range of $3.40 to $3.50 per share. Analysts currently expect earnings of $3.51 per share for the year.

For 2015, the company noted that early bookings are robust and the current order book is better than at the same time last year in both volume and price.

RCL is trading at $61.87, down $1.55 or 2.45 percent on a volume of 2.94 million shares.