Royal Caribbean Cruises Ltd., the world’s second-largest cruise operator, fell the most in more than three months as a stronger U.S. dollar and the need to discount tours in Europe prompted the company to cut its annual profit forecast.
Royal Caribbean tumbled 6 percent to $22.85 at 10:26 a.m. in New York, after earlier declining 7.6 percent for the biggest intraday drop since April 20. The Miami-based company had fallen 1.9 percent this year through yesterday.
“It is hard to distinguish how much of the pressure in Europe is connected to the Costa Concordia incident and how much is due to the economic roller coaster,” Brian Rice, chief financial officer, said in a statement, referring to an accident in January off the coast of Italy involving a ship owned by Carnival Corp. “The timing of the incident left a big gap during our peak booking period and filling that gap is disrupting our normal booking patterns,” he said.
Full-year profit will be $1.70 to $1.80 a share, the company said. That compares with a prior forecast of $1.80 to $2.10 a share. The average analyst estimate was $2.01, according to data compiled by Bloomberg.
The strengthening of the U.S. dollar and decreases in fuel pricing “have essentially offset one another,” the company said. A stronger dollar reduced the full year outlook by about 13 cents a share, according to the statement.