Royal Caribbean Posts Wider-Than-Expected Loss Due to Virus

Royal Caribbean shares fall as the cruise line's adjusted loss exceeds analysts’ expectations due to the coronavirus pandemic.
Author:
Publish date:

Royal Caribbean  (RCL) - Get Report shares fell on Monday after the cruise line reported a second-quarter adjusted loss that far exceeded analysts’ expectations, thanks to the coronavirus pandemic.

Royal Caribbean posted a loss of $1.6 billion, or $7.83 a share, in the quarter, swinging from a profit of $472.8 million, or $2.25 a share, in the year-earlier quarter.

The company adjusted loss was $1.3 billion, or $6.13 a share, for the latest quarter, reversing an adjusted profit of $532.7 million, or $2.54, a year earlier. 

The FactSet analyst consensus called for an adjusted loss of $4.82 a share in the latest quarter.

Royal Caribbean posted a non-cash asset impairment of $156.5 million in the latest quarter.

Revenue sank 94% to $175.6 million from $2.8 billion a year earlier. Analysts anticipated sales of $47 million in the latest quarter.

Royal Caribbean shares recently traded at $51.31, down 1.6%. They'd dropped 61% year to date through Friday.

The coronavirus pandemic shut down the entire cruise industry, and the Cruise Lines International Association has called for a voluntary suspension of cruises through October.

"The covid-19 pandemic is posing an unprecedented challenge to our industry and society,” Royal Caribbean Chief Executive Richard Fain said in a statement.

“Our teams are working tirelessly to return to service soonest and doing so by developing new health and safety protocols to protect the well-being of our guests, crew and destinations we visit."

Meanwhile, “we are using this time to refine our operations to be as efficient as we can while providing the great experiences that so many people are eagerly awaiting," he said.