* Raises 2014 EPS forecast to $3.40-$3.50
* 2nd-qtr adj EPS $0.66 vs est $0.52
* Revenue $1.98 bln vs est $1.99 bln
* Shares rise as much as 9.1 pct, hit life-high
(Adds analyst, executive comment, details, updates shares)
By Devika Krishna Kumar
July 24 Royal Caribbean Cruises Ltd's
quarterly profit beat analysts' average estimate as demand for
its European and Chinese cruises increased and passengers spent
more on board, helping it raise its full-year profit forecast.
Shares of the world's second-largest cruise operator rose as
much as 9.1 percent to a life-high of $61.35.
European cruises account for 22 percent of the capacity in
the company, whose cruise lines include Royal Caribbean
International, Celebrity Cruises and Azamara Club Cruise.
The company raised its full-year earnings forecast to
$3.40-$3.50 per share, from $3.25-$3.45.
Royal Caribbean, which in April warned of pricing pressure
in its biggest market, the Caribbean, said the environment in
the region remained "promotional".
The promotional environment is said to be led by
Europe-based MSC Cruises, which is offering seven-night
Caribbean cruises for as low as $199.
Larger rival Carnival Corp last month forecast an
adjusted profit below market estimates for the current quarter,
blaming increased competition in the Caribbean.
Royal Caribbean and Carnival have been bogged down for two
years by a series of adverse events such as virus outbreaks and
Royal Caribbean is set to launch its ship, Quantum of the
Seas, which features simulated skydiving, bumper cars and roller
The ship, poised to make its debut in November, is already
seeing "extremely strong bookings", Chief Executive Richard Fain
"I don't think we've ever had a new ship where the early
bookings have been so powerful," he said.
Royal Caribbean would also double its capacity in China from
about 6 percent, Fain said.
"They're extremely confident in their numbers and this is
minimal risk. They're going to get a strong return, there's no
doubt about it," industry analyst Stewart Chiron said about the
company's expansion plans in China.
PROFIT BEATS ESTIMATES
Royal Caribbean said net yields, which include ticket sales
and spending on board, rose 2.6 percent in the second quarter
ended June 30, excluding the impact of currency fluctuations.
"Double-digit yield improvement on European and China
sailings is helping offset a continued promotional environment
in the Caribbean," the company said on Thursday. [ID:nPn5QjnVl
The company's net income rose to $137.7 million, or 62 cents
per share, more than five times the $24.7 million, or 11 cents
per share, it reported a year earlier.
Excluding items, the company earned 66 cents per share.
Total revenue rose 5 percent to $1.98 billion.
Analysts on average had expected earnings of 52 cents per
share on revenue of $1.99 billion, according to Thomson Reuters
Royal Caribbean shares were up 8.3 percent at $60.91 on the
New York Stock Exchange in afternoon trading.
(Reporting by Devika Krishna Kumar in Bangalore; Editing by
Savio D'Souza and Maju Samuel)