Royal Caribbean Cruises Ltd. plunged after reporting second-quarter results below Wall Street forecasts and saying Covid-19’s Delta variant is having an impact on bookings.
The cruise operator posted a loss of $5.06 per share (or $1.3 billion), excluding certain items. This compares with the $4.36 per share loss projected by analysts, on average. With virtually no ships during the period, revenue was just $50.9 million, Royal Caribbean said Wednesday, less than the $146.4 million expected.
The cruise industry has been counting on better days ahead. After shutting down because of the pandemic, the first paying cruise ship in about 15 months left a U.S. port in late June. But with cases on the rise again, even in the heart of the Florida industry, the delta variant is clouding the industry’s recovery plans.
The delta variant is causing a “pullback,” especially in demand for very short-term departures, CFO Jason Liberty said.
“There was a little bit of a change in that trajectory, although July was our second-best booking month of the year,” Liberty said in an interview. The pullback was most notable in markets where the variant is up, including Florida, he said.
Royal Caribbean shares fell as much as 5% to $70.74 in New York, the most since July 19, threatening to extend its losing streak to a seventh straight day.
Royal Caribbean is comfortable with the $5 billion it has in liquidity, Liberty said, noting that customer deposits were coming in again. He said the company would be watching for refinancing opportunities.
“We are very focused on getting back to our pre-Covid unencumbered balance sheet,” he said.
In a separate announcement, the company said late Tuesday that it would have its entire fleet sailing again by spring 2022. CEO Richard Fain earlier said he expected most of the fleet to be operational by the end of this year.
