Royal Caribbean Cruises Ltd (RCCL), the second largest cruise shipping group in the world, says overall, booking trends have continued to normalize and are now running at levels comparable to prior year's activity. "Larger than expected discounting has been required for the European season which has lowered the midpoint of the company's Constant-Currency Net Yield expectations for the year by approximately one percentage point from the April guidance," RCCL said in a statement.
"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 Brian J. Rice, executive vice president and chief financial officer. Rice continued, "Our sense is that the former 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."
The company forecast that for the full year of 2012, Net Yields are expected to increase 2% to 3% on a Constant-Currency basis and be between flat and up 1% on an As-Reported basis. The expected effect of deployment initiatives and changes to the company's distribution system to Net Yields remains unchanged at +200 basis points for the full year.
"The company's cost outlook for the year has improved and is expected to offset more than half of the decline in revenue. For the full year, NCC excluding fuel are expected to increase approximately 4% on a Constant-Currency basis (approximately 2% As-Reported). Excluding deployment initiatives and changes to the company's distribution system, Constant-Currency NCC excluding fuel are expected to increase less than 1% on a comparable basis to prior year," RCCL said. Taking into account current fuel pricing and currency exchange rates, and the factors detailed above, the company currently estimates 2012 earnings will be in the range of $1.70 to $1.80 per share.
