Royal Caribbean’s Profit Beats Estimates, Shares Jump

Photo: Royal Caribbean

By Abhijith Ganapavaram and Aravind K

Jan 26 (Reuters) – Royal Caribbean Cruises Ltd forecast higher-than-expected adjusted earnings for 2017, putting the No. 2 U.S. cruise operator on track to beat its own forecast of doubling profit from 2014.

The company’s shares touched their highest in more than a year in morning trade on Thursday. The upbeat forecast also lifted shares of rivals Carnival Corp and Norwegian Cruise Line Holdings Ltd.

Royal Caribbean on Thursday forecast a 2017 adjusted profit of $6.90-$7.10 per share, higher than analysts’ average estimate of $6.80 and its own goal of $6.78.

In October, Royal Caribbean said it was confident of meeting its profit forecast for 2017, buoyed by strong bookings that indicated that it had tided over what has been a turbulent 2016 for the cruise industry.

The company and Carnival Corp benefited in late-2016 from a return in demand for cruises to the Caribbean as consumer spending rose in the United States, allowing the operators to hike ticket prices.

Royal Caribbean operates ships such as Harmony of the Seas and Anthem of the Seas in the Caribbean, its biggest market.

The company reported a higher-than-expected quarterly profit for the fourth quarter, helped by demand for its pricier Caribbean cruises and higher onboard spending.

Net revenue yields, which take into account the spending per available berth, increased 5.3 percent on a constant-currency basis.

Royal Caribbean’s net income rose 26 percent to $261.1 million, or $1.21 per share, in the quarter ended Dec. 31, from a year earlier.

Excluding items, the company earned $1.23 per share, above the average analyst estimate of $1.21, according to Thomson Reuters I/B/E/S.

The company’s revenue rose marginally to $1.91 billion, missing Wall Street expectations of $1.97 billion.

Miami, Florida-based Royal Caribbean’s shares were up 7 percent at $93.85, while Carnival touched more than a 12-year high of $57.11. Norwegian Cruise was up 3.8 percent. (Reporting by Aravind K and Abhijith Ganapavaram in Bengaluru; Editing by Maju Samuel)

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