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Royal Caribbean Posts Loss In Q4; Sees 2013 Earnings Below View

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Royal Caribbean Cruises Ltd. (RCL: Quote) on Monday reported a loss for the fourth quarter, reflecting an impairment charge that more than offset higher revenue and net yields. Excluding items, the company earnings beat analysts' estimates.

Looking ahead, the cruise operator forecast earnings for the first quarter and fiscal 2013 below analysts' expectations.

Miami, Florida-based Royal Caribbean noted that both close-in bookings and onboard spending were stronger than expected in the fourth quarter, resulting in a net yield increase of 1.8 percent on a constant-currency basis to $160.54.

Passenger cruise days for the quarter were 8.80 million, up from 8.78 million in the prior-year period. However, occupancy declined to 101.8 percent from 103.0 percent last year.

Total cruise operating expenses increased less than 1 percent to $1.26 billion. Net cruise costs, excluding fuel, increased 1 percent on a constant-currency basis and 0.4 percent on an as-reported basis.

Royal Caribbean's fourth-quarter net loss was $392.80 million or $1.80 per share, compared to net income of $36.56 million or $0.17 per share in the year-ago period.

The latest quarter's results include non-cash impairment charges of $413.9 million related to the company's Pullmantur brand. The company noted that while the 2013 Wave season was broadly off to a promising start, booking volumes and pricing were down substantially in Spain due to the impact of additional austerity measures there, the lingering impact of the Costa Concordia tragedy and other factors.

Excluding the impairment charge, net income for the quarter was $21.1 million or $0.10 per share, compared to net income of $36.6 million or $0.17 per share in the prior-year quarter. On average, 20 analysts polled by Thomson Reuters expected the company to earn $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter rose 2 percent to $1.81 billion from $1.78 billion in the prior-year period. Analysts had a consensus revenue estimate of $1.82 billion.

For fiscal 2012, Royal Caribbean's net income was $18.29 million or $0.08 per share, down sharply from $607.42 million or $2.77 per share last year. Adjusted net income for the year was $432.2 million or $1.97 per share, compared to adjusted net income of $607.4 million or $2.77 per share in the prior year.

Total revenues for the year grew 2 percent to $7.69 billion from $7.54 billion in the previous year.

Analysts expected the company to report earnings of $1.95 per share for the year on revenues of $7.70 billion.

Looking ahead to the first quarter of fiscal 2013, Royal Caribbean forecasts earnings per share of $0.10 to $0.20. Analysts expect the company to earn $0.28 per share for the quarter.

For fiscal 2013, Royal Caribbean forecasts earnings in a range of $2.30 to $2.50 per share. Street expects the company to earn $2.67 per share for the year.

The company projects net yields for the year to increase 2 to 4 percent on a constant currency basis and 3 to 5 percent on an as-reported basis.

Brian Rice, vice-chairman and chief financial officer of Royal Caribbean said, "We were proactive in reducing our deployment and guest sourcing programs from Europe due to uncertain consumer spending patterns as austerity measures continue to pressure the region. Encouragingly though, demand from our other source markets, especially the U.S., is strong and should more than offset any ongoing weakness in Europe."

In Monday's regular session, RCL is trading at $37.20, up $0.41 or 1.11 percent on a volume of 1.57 million shares.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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