With the global economy still uncertain, Royal Caribbean is just one of many companies that struggle to provide financial forecasts for shareholders and analysts every quarter.
Royal Caribbean chief financial officer Brian Rice is in charge of this task and has taken an approach to widen the range of profit, revenue or other projections while spending more time and effort making sure investors have the information they really need.
“It would certainly make my life easier if we didn't give [financial] guidance."
Rice mentions that Royal Caribbean continues the practice because rival cruise provide Carnival Corp. provides them, so Royal Caribbean feels compelled to keep up.
When it comes to net yelds, a very important performance benchmark, the company has modified the way it provides forecasts for it. Early this year, it projected a four-percentage-point range for the change in its annual yield, wider than the three-percentage-point range of last year’s prediction and the two-point range it has traditionally used, Mr. Rice says.
He says the wider range gives the company breathing room with analysts. With narrower ranges analysts would typically press for more information if the company deviated by even 0.1 percentage point from the midpoint of its projections, he adds.
