Royal Caribbean pares outlook

ROYAL Caribbean said today that fuel and currency moves will cut earnings, but reported hopeful signs on pricing. Royal Caribbean provided a business update as part of a new offering of $250M in senior notes.

“Since the company last provided guidance on 23 April, the H1N1 virus outbreak and rising fuel prices have negatively impacted what otherwise would be considered a stabilising operating environment,” Royal Caribbean said today.

The company kept its estimate of full-year 2009 flu impact at $0.22/share. Fuel pricing is on the rise, but Royal Caribbean’s hedging strategy will keep impact to an additional $0.12/share (at today’s prices).

The company’s other income and expense outlook has worsened by $0.10/share, “primarily due to foreign currency adjustments”. Interest on the new senior notes will hike 2009 interest expenses by $0.05/share.

Royal Caribbean disclosed that booking and pricing levels are stable and remain consistent with prior guidance – with the exception of Pullmantur’s summer business.

Commenting on the new bond offering, Royal Caribbean chairman Richard Fain said: “Although there are clear signs of stablisation and we enjoy solid liquidity, we believe prudence dictates that we be proactive and opportunistic in these uncertain and volatile financial markets.”

(Source: Fairplay)