Royal Caribbean’s 4Q Earnings Tumble 98 Percent

Royal Caribbean Cruises Ltd. said Thursday that its fourth-quarter earnings tumbled 98 percent, missing Wall Street’s expectations, as cruise bookings fell and the company’s fuel costs were higher than expected.

The company also issued guidance for the first quarter of 2009 and the full year that fell well short of analysts’ expectations. Cruise pricing remains very weak, although bookings have started to stabilize, the company said.

Royal Caribbean’s shares dropped $1.21 or 13.4 percent, to close at $7.85 on Thursday. The stock has traded between $5.97 and $41.99 during the past 52 weeks. The stock fell as low as $6.64 during the day, a drop of more than 25 percent.

For the quarter ended Dec. 31, net income fell to $1.4 million, or 1 cent per share, from $70.8 million, or 33 cents per share, a year ago. Revenue dipped 2 percent to $1.46 billion from $1.49 billion in the fourth quarter of 2007.

Analysts polled by Thomson Reuters forecast earnings of 7 cents per share on revenue of $1.46 billion. While crude oil prices receded during the quarter, Royal Caribbean said the prices it paid at the pump lagged those declines. The company also booked an unexpected insurance charge of $13.3 million.

Royal Caribbean said its net yield dropped 5.9 percent during the quarter as the financial crisis in September cut into cruise bookings. Net yield reflects cruise revenue earned by the company without some variable costs like commissions and transportation.

The company said unfavorable foreign currency rates contributed to a steeper net yield drop than its anticipated decline of 4 percent to 5 percent.