1st-Quarter Profits Sink For Cruise Line

[Jason]

MIAMI - Royal Caribbean Cruises Ltd., the world's second-largest cruise operator, said Friday its first-quarter earnings fell 37 percent as revenue edged down, but the results still beat the company's expectations and Wall Street's estimate.

Royal Caribbean shares rose $1.22, or 2.9 percent, to close at $42.77 on the New York Stock Exchange.

First-quarter earnings fell to $119.5 million, or 55 cents per share, from $189.6 million, or 86 cents per share, a year earlier. Revenue fell 2 percent to $1.15 billion from $1.17 billion, as passenger ticket revenue declined.

The company's latest results included a one-time gain that boosted earnings by 16 cents per share. Analysts on average expected the company to post a profit, including the one-time gain, of 48 cents per share on revenue of $1.17 billion, according to Thomson Financial.

"We are very pleased with our first-quarter results," chief executive Richard Fain said in a statement. "All key elements of the business performed very well, and we were able to exceed our previous expectations."

Fain attributed the dip in revenue to a combination of factors. While the price of tickets was up, the company saw a lower-than-expected number of bookings at its two cruise lines - Royal Caribbean International and Celebrity Cruises.

Net costs were up 11.4 percent compared with the same time last year, slightly less than projected.

Fuel accounted for the majority of that increase, with pump prices of $418 per metric ton, compared with previous company expectations of $425 per metric ton. The price was $284 per metric ton in the first quarter of 2005.

Looking ahead, Royal Caribbean said it expected second-quarter earnings per share of 50 cents to 55 cents.

The second quarter will bring additional costs from ship refurbishment, as well as expenses for the inaugural voyage of its much-touted Freedom of the Seas ship.

Source: Laura Wides-Munoz, The Associated Press