Royal Caribbean has reported a loss in its second quarter, hit by the ongoing economic uncertainty in Europe and an industry downturn after the Costa Concordia disaster in January.
The cruise line company reported a loss of $3.6 million, or 2 cents per share, a steep drop from net income of $93.5 million, or 43 cents per share, a year earlier. Revenue rose 3% to $1.82 billion.
“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.”
Royal Caribbean also cut its guidance for the current quarter, and said it expected net yields to decrease about 5% on an as-reported basis. The quarterly results also included a 5 cent per-share mark-to-market loss on the company’s fuel option portfolio.