Investors responded with enthusiasm, bidding the cruise ship operator's stock up more than 10% Thursday after it raised its third-quarter and full-year guidance above consensus estimates. Rival Carnival (CCL) rode the proverbial wave with shares up more than 7%, though it recently offered a gloomier forecast.
"Outperformance was almost all a function of cost control," noted Stifel Nicolaus analyst Steven Wieczynski. "RCL has now posted three straight quarters of impressive expense containment."
Net cruise costs fell 2.8% during the quarter. Excluding fuel-related expenses, net cruise costs dropped 4.4%. Those improvements reflected success in cost-cutting efforts, efficiencies that were achieved while the number of passengers carried during the quarter bumped up 18.4% to more than one million. Fuel expenditures were $6 million better than expected, the operator of Celebrity Cruises and Azamara Club Cruises said. Expense timing and currency fluctuations also helped keep costs in check.
Royal Carribean Stock Rating Report
(RCL) Rating and Financial Analysis
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