(Reuters) -Royal Caribbean forecast current-quarter profit below expectations on Tuesday, due to higher costs amid rising economic uncertainty, sending the cruise operator’s shares down about 8% in premarket trading.
The forecast for annual profit also came below estimates, even though the company raised its target.
Increased fuel costs amid escalating global tensions and expenses related to drydocks, ship deliveries and maintenance have hit the cruise operator.
Royal Caribbean’s third-quarter margins rose only 3.8%, compared with a 13.4% rise a year ago, and 11% growth in the previous quarter.
The company sees fourth-quarter adjusted profit per share to be in the range of $2.74 to $2.79, below analysts’ average estimate of $2.89.
It cites the impact of weather events and the unplanned extension of the temporary closure of its Labadee, Haiti destination on the current quarter’s margin.
It expects fiscal 2025 adjusted profit per share of $15.58 to $15.63, below analysts’ average estimate of $15.68, according to data compiled by LSEG. It had previously forecast a range of $15.41 to $15.55.
For the third quarter ended September 30, Royal Caribbean posted revenue of $5.14 billion, inline with analysts’ average estimate of $5.16 billion, and an adjusted profit of $5.75 per share that exceeded expectations of $5.67.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Shinjini Ganguli)
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