RCC Q2 Results and Forecast

Royal Caribbean Cruises (RCC) attributed its first second quarter loss in recent memory to the lingering recession and the H1N1 virus, while building a strong earnings platform for the future, according to Chairman and CEO Richard Fain.

RCC reported a loss of $35.1 million, or $0.16 per share, on revenues of $1.3 billion for the second quarter ended June 30, 2009, compared to net income of $84.7 million, or $0.40 per share, on revenues of $1.6 billion for the same quarter last year. The loss was lower than the market consensus of $0.12 per share.

RCC’s guidance for Q3 is for net earnings from $0.95 to $1.00, compared to a pre-call consensus of $0.93, and actual earnings of $1.92 last year; and for the full year, the net earnings guidance is from $0.70 to $0.80, compared to a pre-call market consensus of $1.24, and actual earnings of $2.68 last year. RCC last cut is forecast in June.

The market reacted immediately by sending the company’s stock down more than 15 percent.

Counterpoint

Was the market drop an overreaction? Analysts provide different points of view.

Industry Impact

According to the Cruise Lines International Association (CLIA), direct spending on goods and services by cruise lines and their passengers totaled $19.1 billion in the U.S. 2008, a 2 percent increase over 2007. Indirect spending, according to CLIA, was $40.2 billion, up six percent over 2007.

What the Numbers Mean

Cruise Industry News dissects the financial reports of Carnival Corporation, Royal Caribbean and Norwegian Cruise Line and finds out who the leader is in revenue per passenger day, onboard spending, operating costs and fuel savings. You'd be surprised.

And there is more: An Emission Control Area may soon apply to the U.S. and Canada; Louis charters a ship to Brazilian CVC; the International Association of Antarctica Tour Operators has agreed upon a number of measures to enhance marine safety; Carnival U.K. promotes executives; and more.

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