January 24, 2018 / 1:15 PM / a year ago

Royal Caribbean hits record high on upbeat results, lifts rivals

(Reuters) - Royal Caribbean Cruises (RCL.N) reported fourth-quarter results that beat Wall Street estimates, helped by higher on-board spending and lower cruise operating expenses in the crucial holiday season.

FILE PHOTO: Tourists walk beside Royal Caribbean's cruise ship 'Enchantment of the Seas' after they arrive in Cozumel, Mexico May 27, 2009. REUTERS/Gerardo Garcia/File Photo

Shares of the No.2 U.S. cruise operator rose as much as 5.92 percent to hit a record high of $134.75 on Wednesday.

Shares of rivals Carnival Corp (CCL.N) and Norwegian Cruise Line Holdings Ltd (NCLH.N) also rose after the company said it expects strong bookings in 2018.

Royal Caribbean’s onboard revenue, which makes up more than one-fourth of its total revenue, rose 5 percent to 584.1 million in the quarter.

The company also forecast full-year adjusted earnings per share in the range of $8.55 to $8.75. The midpoint of the range came in slightly above the analyst average estimate of $8.63 per share.

Royal Caribbean’s 2018 growth would benefit from its strong bookings at higher price points and rising disposable income that could drive consumer spending on travel and cruising, Moody’s Lodging and Cruise analysts said.

Cruise travel is expected to rise to 27.2 million passengers in 2018, according to Cruise Lines International Association, and industry trade body.

However, the cruise operator’s 2018 first quarter earnings per share forecast of 95 cents fell short of the average analyst estimate of $1.02.

“In our view, RCL wants to be conservative as possible and start the year in a position where they can raise,” Stifel analyst Steven M. Wieczynski said in a pre-earnings client note.

The company also announced a bonus plan that would equal to 5 percent of the salaries of its 66,000 employees.

Net income attributable to the company’s shareholders rose to $288 million, or $1.34 per share, in the quarter ended Dec. 31 from $261.1 million, or $1.21 per share, a year earlier.

Excluding items, the company earned $1.34 per share. Analysts on average had expected a profit of $1.20 per share, according to Thomson Reuters I/B/E/S.

Net revenue rose 10 percent in the quarter to $2 billion, beating the analyst average estimate of $1.97 billion.

Shares of the Miami, Florida-based company which is set to debut the world’s largest cruise ship, Symphony of the Seas, were trading at $132.27, up 3.9 percent in morning trading.

(This story was refiled to add missing word in paragraph 3.)

Reporting by Karina Dsouza and Vibhuti Sharma in Bengaluru; Editing by Anil D'Silva and Arun Koyyur

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