Royal Caribbean Cruises Adjusts Profit Forecasts Due to High Fuel Prices

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By Jacob Maslow

royal carribean cruise shipRoyal Caribbean Cruises (NYSE:RCL) has adjusted their profit forecast for the year. The company adjusted its profit per share estimate to $4.45 – $4.65. Initially, the company’s profit per share was forecasted at $4.65 – $4.85.

Royal Caribbean states that the strong dollar and fuel price increase is the reasoning for the adjustment.

Fuel expenses were estimated to be $834 million, up from the initial forecast of $806 million. Onboard purchases also hurt the company’s first-quarter revenue, which did not reach analyst estimates. The company blames a strong dollar for causing foreign cruise-goers not to make onboard purchases while on cruises.

Revenue for the company also feel by 3.7%, down to $1.82 billion.

The company’s stock closed at $79.03 on Friday and is now priced at $73. The stock is down 7.5% on the day.

Investors should note that Royal Caribbean is not the only company struggling in the industry. Carnival Corp (NYSE:CCL), a direct rival and the world’s largest cruise company, saw its shares fall 2% on the day in early morning trading, with prices now down 1% on the day. Despite market conditions, Carnival has been able to reach or surpass analyst forecasts, but is struggling under higher fuel prices.

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