RCCL Reports Q2 Results, Unveils Cost-Cutting Initiative

Royal Caribbean Cruises Ltd. said it turned an $84.7 million profit during the second quarter of 2008, a 34 percent decline over second-quarter 2007. Revenue for the quarter was $1.6 billion, compared with $1.5 billion in second-quarter 2007.

Net yields improved by 1 percent, RCCL said. Net cruise costs per available passenger cruise day increased by 6.7 percent, versus guidance of an increase of 7 percent to 8 percent.

Most of the increase was due to fuel costs; fuel prices increased by 55 percent during the quarter, RCCL said. Excluding fuel, net cruise costs per available passenger cruise day increased 2 percent.

The company also unveiled a cost savings initiative that includes eliminating 400 shoreside positions and eliminating some non-core operations. The company said the initiative would reduce spending by about $125 million a year.

RCCL said that the company “continues to enjoy healthy demand for its products, and its revenue expectations have not changed materially.” It said it expected net yields to increase 3 percent to 4 percent for the full year 2008.

UBS equity investment analyst Robin Farley said that investors would be happy to hear that RCCL is focusing on cost, but said the company would “need to deliver.”