Royal Caribbean International reported a second-quarter loss on Wednesday that was wider than analysts were anticipating, as the spread of the delta coronavirus variant slowed the rebound in near-term cruise bookings.
Shares of the company fell more than 2% in premarket trading.
Here’s how the company did for its second quarter ended June 30 compared with what analysts surveyed by Refinitiv were anticipating:
- Loss per share: $5.06 adjusted vs. $4.39 expected
- Revenue: $50.9 million vs. $149.7 million expected
During 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, a year earlier.
Excluding items, Royal Caribbean said it lost $5.06 per share, which was wider than the loss of $4.39 per share expected by analysts surveyed by Refinitiv.
Royal Caribbean reported revenue of $50.9 million, which was far less than $149.7 million analysts had expected.
The company said bookings grew 50% from the first quarter.
“Overall, the booking activity for 2021 sailings is consistent with the company’s expected capacity and occupancy ramp up, at prices that are higher than 2019,” Royal Caribbean said in its press release.
“While it’s too early to make any definitive conclusions of the impact of the Delta variant on bookings, the company has seen a modest impact on closer-in bookings. However, 2022 continues to remain strong; in particular the spring and summer months are performing well,” the company said.
The cruise operator anticipates that 80% of its fleet will be back in service by year’s end.
Royal Caribbean’s average monthly cash burn rate in its second-quarter was about $330 million, a higher rate than that of the previous quarter.
The cruise industry is one of the last to return to pre-pandemic operations. Several high-profile outbreaks aboard ships at the beginning of the health crisis fanned fears about how easily the virus can spread on ships. The Centers for Disease Control and Prevention has imposed strict guidelines to try to prevent further outbreaks.
On Tuesday, Royal Caribbean announced its full fleet will return by next spring.
“More than 110,000 guests have cruised with us since December, and they’ve done so safely while enjoying the memorable vacations they trust we’ll bring to life,” Michael Bayley, president and CEO of Royal Caribbean International said in press release.
As the delta coronavirus variant continues to spread, Royal Caribbean last week began requiring all travelers on U.S. cruises five days or longer to have a negative Covid test before boarding. This came after six passengers tested positive for the virus, despite four of them being fully vaccinated.
Royal Caribbean shares peaked above $99 in February, buoyed up by the hope the industry would bounce back, as increasing numbers of people were being vaccinated. However, as vaccination rates slowed and the delta variant spread, the stock has pulled back. Shares are basically flat for the year. Royal Caribbean has a market value of $18.96 billion.
Read the full release from Royal Caribbean International.
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Source: Business - cnbc.com
