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Royal Caribbean posts 2Q loss, slashes forecast

MIAMI (AP) -- Royal Caribbean tumbled to a second-quarter loss and slashed its earnings forecast for the year, blaming the economic crisis in Europe and industry-wide damage from the deadly grounding of a ship belonging to Carnival.

Shares fell 6 percent in early trading.

The company posted a loss of $3.7 million, or 2 cents per share, compared with net income of $93.5 million, or 43 cents per share, a year earlier.

Revenue rose 3 percent to $1.82 billion.

Analysts polled by FactSet expected net income of 3 cents per share on revenue of $1.84 billion.

Bookings have essentially returned to normal after a rough first half that was dragged down by the sinking of the Costa Concordia. The Carnival ship ran aground off the Italian coast in January killing 32 people. Paired with a slowing global economy, the industry has struggled to regain its footing.

Royal Caribbean is being forced to cut prices more than expected to lure travelers in Europe.

"The steady drumbeat of negative news emanating out of Europe is certainly having an impact," CEO Richard D. Fain said. "North America is holding up reasonably well; Asia is a big plus; but Europe is a pretty consistent minus."

"It is hard to distinguish how much of the pressure in Europe is connected to the Costa Concordia incident and how much is due to the economic roller coaster," said CFO Brian J. Rice. "Our sense is that the (Concordia) is no longer having a major impact on our bookings, especially amongst experienced guests. However, the timing of the incident left a big gap during our peak booking period and filling that gap is disrupting our normal booking patterns."

Because of that, some currency impacts and other cost increases, Royal Caribbean Cruises Ltd. now expects to earn between $1.40 and $1.50 per share for the year, down from its prediction of $1.80 to $2.10 per share just three months ago. Analysts, on average, expect $2.01.

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