Royal Caribbean Raises Profit View on Stronger Bookings

Royal Caribbean Cruises Ltd raised its full-year forecast on Thursday, saying bookings have been stronger than expected, even in crisis-hit Europe, and that it has been able to charge more per cruise.

Shares of the world's second-largest cruise operator were up 10.4 percent in Thursday morning trading. In January, a ship operated by larger rival Carnival Corp & Plc , the Costa Concordia, ran aground off the coast of Italy, killing 32 people and leading to a reduction in bookings and prices industry wide.

But Royal Caribbean said that the effect of that accident "has continued to wane" and that bookings in the third quarter were stronger than expected, even in Europe, where the Costa
Concordia accident made headlines for months and where many customers have been hit by government austerity measures.

Royal Caribbean, whose other lines include Celebrity Cruises did not provide a forecast for 2013, but said it was "encouraged" by what it is seeing for bookings for next year. In July, the cruise operator cut its profit forecast citing the need to slash cruise prices, and forecast net yields, a gauge of how much each cabin generates, to fall in the third quarter.

Instead, net yields rose slightly, helped by firmer prices and stronger demand in every region. Royal Caribbean now expects 2012 earnings of $1.85 to $1.95 per share, 15 cents higher than its previous forecast range and above the $1.78 that analysts were expecting.

The company also expects revenue yield, which reflects how much money each cabin generates beyond the cruise ticket itself, to be up 3 percent for the year, excluding the effects of currency. Royal Caribbean's third-quarter net income fell to $367.8 million, or $1.68 per share, on revenue of $2.26 billion, from $399 million, or $1.82 per share, on revenue of $2.32 billion a year earlier.