Royal Caribbean profit climbs as industry rebounds
NEW YORK (AP) — Royal Caribbean signaled a rebound in the cruise industry Monday by posting a fourth-quarter profit of $7 million, compared to a loss during the same quarter last year of $393 million.
The company attributed the improvement to stronger sales onboard its ships and demand for last-minutes bookings in Europe and Asia.
Net income totaled 3 cents a share, compared with last year’s loss of $1.80. Excluding restructuring charges, net income totaled 23 cents a share, beating the estimate of 18 cents from Wall Street analysts surveyed by FactSet.
“Six months ago we said we thought we had reached an inflection point and these figures clearly bear that out,” CEO Richard D. Fain said in a statement. “It has been a challenging year, but the fact that we have achieved our guidance from a year ago nicely demonstrates the strength of our business.”
The outlook for 2014, Fain said, “is looking highly promising.” Royal Caribbean expects its adjusted earnings per share to be $3.20 to $3.40 per share this year, up from $2.40 last year and $1.97 in 2012. Analysts are forecasting an adjusted profit of $3.21.
Revenue at the Miami-based company rose 2.7 percent to $1.85 billion. Royal Caribbean Cruises Ltd. is the world’s second largest cruise operator with 41 ships. Its brands include namesake Royal Caribbean, Celebrity Cruises and Azamara Club Cruises. Six additional ships are planned.
The biggest growth in revenue for Royal Caribbean came from the sale of onboard extras. Ticket revenue only climbed 1 percent during the quarter but onboard sales and other revenues jumped 6 percent. Overall operating expenses rose 2 percent.
The company recorded restructuring and related charges of $56.9 million for the full year, including $43 million in the fourth quarter related to the pending sale of its Pullmantur cruise line’s non-core businesses: a land tour company and a Spanish travel agency.
The number of passengers carried on all the brands climbed 4 percent and the overall number of passenger cruise days — an industry measurement of days spent on board multiplied by overall passengers — rose 1.5 percent. That shows that while the cruise line carried more passengers, they cruised for slightly shorter periods.
The company’s stock rose $1.17, or 2.5 percent, to $48.30 in early trading. Investors apparently shrugged off Sunday’s early cancellation of a 10-day Caribbean cruise after hundreds of passengers and crew members were sickened with a gastrointestinal illness.