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 - Get Report) 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.
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