MIAMI (AP) -- Royal Caribbean Cruises Ltd. says that the cruise ship tragedy off the coast of Italy is having a significant near-term impact on bookings but that cancellations have remained within normal levels.
The announcement on Thursday came as the cruise operator reported its fourth-quarter net income climbed 15 percent as revenue improved.
The grounding of Carnival Corp.'s Costa Concordia off the Italian coast last month killed at least 17 people. There are 15 people still missing and presumed dead.
Royal Caribbean said that it's hard to determine what impact the cruise tragedy will have on its 2012 revenue, but that North America's overall booking volumes are down by low to mid-teen percentages over the past few weeks compared with the prior-year period. The Miami company said the drop-off is even higher in Europe, where media coverage of the incident has been more extensive. Royal Caribbean did not give specifics on the European decline, but did say that the results vary significantly by country.
The cruise operator said that pricing for the year is still higher than it was a year earlier and that longer-term bookings remain healthy. Royal Caribbean said that bookings have started to recover, particularly in North America, and that the Italian tragedy is not expected to have a significant long-term impact on its business.
"We have clearly lost some of our positive momentum in the short term," Executive Vice President and Chief Financial Officer Brian Rice said in a statement. "Fortunately, we had a very strong order book before the tragedy; our brands are back in the market advertising and we do not expect any significant long term impact to our business."
Factoring in the uncertainty surrounding bookings as well as current fuel pricing and currency exchange rates, Royal Caribbean predicts 2012 earnings between $1.90 and $2.30 per share.
Analysts surveyed by FactSet forecast earnings of $2.94 per share.
For the fourth quarter, Royal Caribbean earned $36.6 million, or 17 cents per share. A year earlier it earned $31.9 million, or 15 cents per share.
The results topped the 15 cents per share that analysts expected.
Revenue for the period ended Dec. 31 increased 11 percent to $1.78 billion from $1.6 billion, which met Wall Street's forecast.
Royal Caribbean and Carnival are considered bellwethers for the sector. They provide travel from the U.S. and abroad.
Net yields, which measures the amount a cruise company makes from its passengers after removing expenses, rose 3.5 percent on a constant currency basis.
For the year, Royal Caribbean's earnings rose 18 percent to $607.4 million, or $2.77 per share. That compares with earnings of $515.7 million, or $2.37 per share, in the previous year.
Annual revenue rose 12 percent to $7.54 billion from $6.75 billion.
Net yields increased 2.4 percent on a constant currency basis.
The company expects first-quarter earnings in a range of 10 cents to 20 cents per share. Wall Street foresees earnings of 25 cents per share.
Royal Caribbean, which runs Celebrity Cruises, Royal Caribbean International and other brands, has 39 ships in service and two under construction. Its stock rose 39 cents to $28.63 in morning trading.
There are no comments yet