- The Washington Times - Tuesday, April 21, 2009

NEW YORK (AP) - Cruise operator Royal Caribbean Cruises Ltd. reports earnings for its first quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Royal Caribbean’s first quarter encompassed the cruise industry’s all-important “wave season,” the period from January through March when cruise bookings usually surge.

Despite the drop in consumer spending, Royal Caribbean said booking patterns seemed to stabilize in January although the company was forced to offer deep discounts to fill its ships. At the time, the company said its revenue outlook for 2009 was weak, due to the lower ticket prices and onboard spending.

Like its rival, Carnival Corp., Royal Caribbean has reported that less expensive Caribbean cruises are seeing stronger demand than more expensive routes.

BY THE NUMBERS: Royal Caribbean has predicted it will report a loss for the first quarter between 30 cents and 35 cents per share. Analysts surveyed by Thomson Reuters on average forecast a loss of 34 cents per share on revenue of $1.31 billion.

ANALYST TAKE: Investors will be looking for signs that cruise demand is steady and, more importantly, that booking prices are starting to rebound. In a recent note to investors, Steven Wieczynski of Stifel Nicolaus & Co. said he expects cost-cutting measures taken by Royal Caribbean to help boost its bottom line once consumer spending improves.

WHAT’S AHEAD: Last week, Royal Caribbean announced it had arranged funding commitments for 80 percent of the price of its new Oasis of the Seas cruise ship. The new ship is expected to launch in December.

Susquehanna Financial Group’s Robert LaFleur said the announcement will reassure investors that the company “can obtain financing despite the current economic environment.” Investors also hope the Obama Administration’s loosening of restrictions on some travel to Cuba may signal the potential for a future cruise market to the communist country.

Even if broader travel and trade restrictions are lifted, Wachovia Capital Markets analyst Timothy Conder estimated one to three years will pass before the cruise industry begins calling on Cuban ports.

STOCK PERFORMANCE: Royal Caribbean shares tumbled more than 40 percent during the period, closing at $8.01 on March 31. The stock has traded between $5.40 and $35.15 during the past 52 weeks.

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