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Royal Caribbean International on Wednesday reported a larger second-quarter loss than analysts expected, as the spread of the delta coronavirus variant slowed the rebound in short-term cruise bookings.
The company’s shares fell nearly 1% in pre-market trading.
Here’s how the company fared for its second quarter ended June 30 compared to what analysts polled by Refinitiv expected:
- Loss per share: $ 5.06 adjusted vs $ 4.39 expected
- Income: $ 50.9 million vs. $ 149.7 million expected
In its second quarter, the company’s net loss narrowed to $ 1.35 billion, or $ 5.29 per share, from a loss of $ 1.64 billion, or $ 7.83 per share. action, a year earlier.
Excluding items, Royal Caribbean said it lost $ 5.06 per share, which is higher than the loss of $ 4.39 per share expected by analysts polled by Refinitiv.
Royal Caribbean reported revenue of $ 50.9 million, which was well below the $ 149.7 million analysts expected.
The company said bookings were up 50% from the first quarter.
“Overall, booking activity for the 2021 crossings is in line with the company’s expected capacity and scale-up, at prices above 2019,” Royal Caribbean said in its press release.
The higher prices occur even after accounting for the dilutive impact of future cruise loans.
“While it’s too early to draw firm conclusions about the impact of the Delta variant on bookings, the company has seen a modest impact on closer bookings. However, 2022 remains strong; especially the spring and summer months are performing well. well, ”the company said.
The company also said that in June it was receiving 90% more bookings each week, compared to the last quarter.
“The return from the cruise has been faster than expected,” said CEO and Chairman Richard Fain. “We are monitoring the impact of the Delta variant and other likely variants, but overall we remain optimistic about our assembly trajectory going forward.”
The cruise line expects 80% of its fleet to be returned to service by the end of the year.
Cruise travelers are also spending more than usual, Jason Liberty, executive vice president and chief financial officer of the company, said in the statement.
Royal Caribbean’s average monthly consumption rate in the second quarter was around $ 330 million, higher than the previous quarter. The company attributed this trend to the cost of returning additional vessels to service.
As business continues to grow, Royal Caribbean expects spending to increase. It will also incur costs for returning crew members to ships and implementing improved health and safety protocols.
The cruise line ended its quarter with $ 5 billion in cash.
The cruise industry is one of the latest to return to pre-pandemic operations. Several high-profile outbreaks on board ships at the start of the health crisis have fueled fears about how easily the virus can spread on ships. The Centers for Disease Control and Prevention has imposed strict guidelines in an attempt to prevent new outbreaks.
On Tuesday, Royal Caribbean announced that its full fleet will return next spring.
“Over 110,000 guests have sailed with us since December, and they have done so safely while enjoying the memorable vacation they trust we will bring to life,” said Michael Bayley, President and CEO of Royal Caribbean International in a press release.
As the delta coronavirus variant continues to spread, Royal Caribbean last week began requiring all travelers cruising the United States for five days or more to test negative for Covid before boarding. This came after six passengers tested positive for the virus, although four of them were fully vaccinated.
Royal Caribbean shares peaked above $ 99 in February, supported by hopes the industry would rebound, as growing numbers of people were vaccinated. However, as vaccination rates slowed and the delta variant spread, the stock declined. Stocks are basically flat for the year. Royal Caribbean has a market value of $ 18.96 billion.
Read the full Royal Caribbean International press release.
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