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Royal Caribbean hurt by weak European demand

Source : AP
Last Updated: Mon, Feb 04, 2013 15:30 hrs

Cruise giant Royal Caribbean lost $392.8 million in the fourth quarter because of losses associated with its Spanish cruise line, Pullmantur.

The world's second-largest cruise line wrote down $413.9 million due to a substantial drop in bookings and prices in Spain following the government's austerity measures there. Royal Caribbean also blamed the January 2012 sinking of the Costa Concordia, owned by rival Carnival Corp., for a drop in traffic.

Strong demand from America is offsetting losses seen in Europe, according to the Miami-based company.

The loss for the three-month period ending Dec. 31, was $1.80 a share. That's down from a profit of $36.6 million, or 17 cents a share, during the same quarter last year.

If it weren't for the writedown of the Pullmantur brand, Royal Caribbean would have posted a profit in the fourth quarter. The company's adjusted profit of 10 cents per share beat expectations for 6 cents per share, according to FactSet.

"Looking forward, we see a tale of two continents; North America is doing well, while parts of Europe continue to be a challenge. Nonetheless, we are encouraged that the former will countervail the latter," Royal Caribbean Cruises Ltd. CEO Richard D. Fain said in a statement.

For the full year, the company which also includes the Celebrity Cruises, Azamara Club Cruises and Croisieres de France brands, had a net profit of $18.3 million or 8 cents a share, down from $607.4 million or $2.77 a share in 2011.

The number of passenger carried in 2012 remained steady at 4.8 million, while the number of days they spent on the ships ticked up 1 percent.

Its revenue from passenger tickets and from onboard sales was $1.8 billion, up 1.7 percent from the same period last year. Its operating expenses were $1.3 billion, up 0.6 percent.

The cruise line's biggest increase in expenses came from fuel. It spent $229.3 million on fuel in the fourth quarter, up 10.2 percent from the same time last year. For the year, fuel costs soared 19 percent.

Royal Caribbean stock was up 56 cents to $37.35 Monday morning.

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Scott Mayerowitz can be reached at http://twitter.com/GlobeTrotScott.




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