Royal Caribbean Cruises, the world's second-largest cruiseship operator, reported first-quarter profit that fell more than analysts estimated on lower demand in the Caribbean and the purchase of a Spanish company.
Net earnings plummeted 93 per cent to US$8.83 million, or four US cents a share, two US cents below estimates. Profit a year earlier came to US$119.5 million, or 55 US cents, Miami-based Royal Caribbean said on Tuesday.
The company cut prices in the Caribbean because of sluggish demand, and said bookings haven't picked up in the second quarter. First-quarter profit was reduced by Pullmantur SA, the Spanish unit it bought last year to reduce dependence on the Caribbean, because European business is strongest in the summer.
'Demand trends in the Caribbean continue to be weak,' Goldman Sachs analyst Steven Kent said. 'This was not a great quarter and the outlook seems more uncertain.'
Royal Caribbean said that first-quarter revenue climbed 6.7 per cent to US$1.22 billion, matching analysts' estimates. In the year-earlier period, profit included a gain of 16 US cents from a lawsuit settlement. The company forecast second-quarter profit of 59-63 US cents a share, above analysts' estimates of 53 US cents. The company repeated its full-year earnings guidance of US$3.05 to US$3.20 a share, compared with estimates of US$3.13.
The company said that demand in the Caribbean has been 'weaker than expected' in the first half of this year, forcing it to lower prices more than it forecast in February.
The net yield, or average revenue per passenger per day, dropped 3.4 per cent for the first quarter to US$161.11. That was more than the 3 per cent decline the company forecast in February.
Passenger loads and pricing for the fourth quarter and into the first quarter of 2008 are ahead of the same period last year, Royal Caribbean said, without being more specific.
The company said that its 2007 net yield would rise 2 per cent, less than earlier forecasts for a 3 per cent gain. Every one percentage point decline in net yield equals 19 US cents of earnings per share, according to Lehman Brothers analyst Felicia Hendrix.
Royal Caribbean boosted its forecast for fuel prices this year by 14 per cent to an average of US$412 per tonne, higher than the US$361 forecast in February. The company has hedges, or financial instruments used to blunt price spikes, for half its fuel needs this year and 56 per cent in the second quarter.
Royal Caribbean bought Pullmantur last year for 430 million euros (S$890 million). Pullmantur's results, which are reported on a two-month delay, tend to be better in the summer months than other lines, Royal Caribbean reiterated Tuesday.
Net earnings plummeted 93 per cent to US$8.83 million, or four US cents a share, two US cents below estimates. Profit a year earlier came to US$119.5 million, or 55 US cents, Miami-based Royal Caribbean said on Tuesday.
The company cut prices in the Caribbean because of sluggish demand, and said bookings haven't picked up in the second quarter. First-quarter profit was reduced by Pullmantur SA, the Spanish unit it bought last year to reduce dependence on the Caribbean, because European business is strongest in the summer.
'Demand trends in the Caribbean continue to be weak,' Goldman Sachs analyst Steven Kent said. 'This was not a great quarter and the outlook seems more uncertain.'
Royal Caribbean said that first-quarter revenue climbed 6.7 per cent to US$1.22 billion, matching analysts' estimates. In the year-earlier period, profit included a gain of 16 US cents from a lawsuit settlement. The company forecast second-quarter profit of 59-63 US cents a share, above analysts' estimates of 53 US cents. The company repeated its full-year earnings guidance of US$3.05 to US$3.20 a share, compared with estimates of US$3.13.
The company said that demand in the Caribbean has been 'weaker than expected' in the first half of this year, forcing it to lower prices more than it forecast in February.
The net yield, or average revenue per passenger per day, dropped 3.4 per cent for the first quarter to US$161.11. That was more than the 3 per cent decline the company forecast in February.
Passenger loads and pricing for the fourth quarter and into the first quarter of 2008 are ahead of the same period last year, Royal Caribbean said, without being more specific.
The company said that its 2007 net yield would rise 2 per cent, less than earlier forecasts for a 3 per cent gain. Every one percentage point decline in net yield equals 19 US cents of earnings per share, according to Lehman Brothers analyst Felicia Hendrix.
Royal Caribbean boosted its forecast for fuel prices this year by 14 per cent to an average of US$412 per tonne, higher than the US$361 forecast in February. The company has hedges, or financial instruments used to blunt price spikes, for half its fuel needs this year and 56 per cent in the second quarter.
Royal Caribbean bought Pullmantur last year for 430 million euros (S$890 million). Pullmantur's results, which are reported on a two-month delay, tend to be better in the summer months than other lines, Royal Caribbean reiterated Tuesday.