Royal Caribbean forecast fourth-quarter profit below expectations on Tuesday, as the cruise operator faces higher costs, sending its shares down about 8% in early trading.The company raised its forecast for annual profit
Royal Caribbean forecast fourth-quarter profit below expectations on Tuesday, as the cruise operator faces higher costs, sending its shares down about 8% in early trading.
The company raised its forecast for annual profit but that too fell short of expectations, tempering a strong year that saw shares rise about 38%.
Increased fuel costs amid escalating global tensions and expenses related to drydocking, ship deliveries and maintenance have hit the company.
Royal Caribbean forecast fourth-quarter adjusted profit per share to be in the range of $2.74 to $2.79, below analysts' average estimate of $2.89, according to data compiled by LSEG.
Cruise operators may also be seeing pressure due to the government shutdown affecting port activity, further casting a gloom on investor sentiment, said Robert Pavlik, senior portfolio manager at Connecticut-based Dakota Wealth.
Royal Caribbean said the impact of weather events and the unplanned extension of the temporary closure of its Labadee, Haiti destination will weigh on current-quarter margin.
The company's third-quarter margin rose 3.8%, compared with a 13.4% jump a year ago, and an 11% increase in the prior quarter.
Gross cruise costs per available passenger cruise days increased 2.7%.
Royal Caribbean expects fiscal 2025 adjusted profit per share of $15.58
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