Cost cutting and better-than-expected revenue helped Royal Caribbean Cruises Ltd. beat its own and Wall Street's estimates with a $3.4 million fourth-quarter profit.
RCCL more than doubled its quarterly earnings from 2008, on equal revenues.
It ended a tumultuous 2009 with full-year earnings of $162.4 million, down significantly from its 2008 net income of $573.7 million. The year was helped by an 18% decline in fuel costs, aided by lower at-the-pump prices and a 3.7% consumption improvement.
RCCL CEO Richard Fain said, "Good cost discipline and better-than-expected revenues have enabled us to end 2009 on a decidedly upbeat note."
Fourth-quarter cruise costs were down 10.5%, offsetting a yield decline of 7.2%.
He noted during a conference call with analysts that "like with a diet, it's harder to keep weight off than lose it in the first place. But we are determined to maintain the cost discipline that has helped us so much."
Fain said during the call that the company is also benefiting from the success of the its newest ships, the Oasis- and Solstice-class vessels.
"These ships are commanding tremendous premiums, their onboard spend is way up and the economies of scale are working," Fain said.
Onboard revenue is up across its fleets, RCCL said, citing better sales in beverage, shops, the casino and the spa.
Looking ahead, Fain said that Wave season was off to a "promising start."
Brian Rice, the company's CFO, said that while it was still early in the selling cycle for 2010, "each of the last three weeks has generated record booking volume and pricing ahead of the same time last year."
Rice said demand was not ahead of prerecession levels.
"We are experiencing clear signs of a recovery in our order book," Rice said. "Since September our booking volume is more than 30% higher than the same time one year ago. ... We are pleased to see solid yield recovery under way."
Current bookings levels are still influenced by the weak economy, he said, but he added that the lines can control discounting.