Royal Caribbean Profits Jump

Jason · July 30, 2004

Royal Caribbean Profits Jump, Ups Outlook

By John Acher OSLO (Reuters) -

Norwegian-American cruise line Royal Caribbean Cruises posted a sharper gain than expected in second-quarter profits, helped by higher prices, and hiked its 2004 earnings guidance on Wednesday.

Its shares surged more than 8 percent.

The world's second-biggest cruise company after U.S. Carnival gave a bright outlook for the full year and said the 2005 booking season was off to a good start as the global tourism market recovers from a weak 2003, when travel was discouraged by war in Iraq and the SARS virus.

"The booking environment continues to be strong as evidenced by widespread improvements in pricing and occupancy," Miami-based Royal Caribbean (RCCL) said in a statement.

"The marketplace is demonstrating characteristics that we haven't seen since prior to 2001," it said. Royal Caribbean struggled along with its rivals in a weak global market after the September 11 attacks in the United States.

Net profit rose to $122.2 million in April-June from $55.7 million in the same period a year earlier and beat an average forecast for $119 million in a Reuters survey of eight analysts. It was within the range of forecasts of $105-$136 million.

RCCL shares were up 8 percent to 310 crowns at 1355 GMT, outperforming a firm Oslo bourse. The share has traded in 2004 between a low of 231 crowns hit in January and a high of 328 crowns in March.

RCCL raised its full-year 2004 earnings guidance to $2.25-$2.40 per share from an earlier $2.10-$2.30 and lifted its forecast for growth in net yields to 7-9 percent this year over 2003 levels, from an earlier 5-7 percent.

Second-quarter earnings per share rose to $0.59 from $0.28 a year ago, beating the analysts' average expectation of $0.57 in a Reuters poll mainly among Norwegian analysts.

One Norway-based analyst said the U.S. consensus estimate had been lower at $0.53 and that Carnival's above-forecast results in June suggested that Royal Caribbean's report would be strong.