Royal Caribbean reported its second quarter fiscal results for 2012 of a net loss of $3.6 million.
Larger than anticipated discounting in Europe has hurt Royal Caribbean's bottom line, despite solid demand in the Caribbean and Asia. The impact of the Costa Concordia disaster continues to affect Royal Caribbean, particularly in the second and third quarters.
"The steady drumbeat of negative news emanating out of Europe is certainly having an impact," said Richard D. Fain, chairman and chief executive officer. Fain continued, "As a result, we are seeing pluses and minuses in the different geographical markets - North America is holding up reasonably well; Asia is a big plus; but Europe is a pretty consistent minus. Overall we have seen about a 100 basis point drop in our yield projections, but we expect to offset over half of this decline with lower spending."
The outlook for the rest of 2012 is being reduced somewhat, due to the strengthening of the U.S. dollar. The dollar's gain has reduced the company's full year outlook by approximately $0.13 per share. This outlook reduction has been largely offset by the reduction in bunker pricing that occurred during this same time period. The net effect of these currency and fuel price changes is essentially neutral for the company's full year earnings outlook. However, the mark-to-market loss on the options is expected to cost the company a ($0.05) per share charge at current prices versus prior guidance.
You can view the full quarterly results.