Cruise line says swine flu fear cut into profits

CHICAGO — Royal Caribbean Cruises Ltd. said Wednesday its second-quarter loss was worse than expected, and it lowered its outlook for the year, saying cancellations and other costs from this spring's swine flu outbreak cut into profits.

The results sent shares down more than 17 percent before they recovered slightly.

For the three months that ended June 30, the owner of Royal Caribbean International, Celebrity Cruises, Pullmantur Cruises, Azamara Cruises and CDF Crosiers de France, said it lost $35.1 million, or 16 cents per share.

That compares with a quarterly profit a year earlier of $84.7 million, or 40 cents per share.

The swine flu cut Royal Caribbean's profit by 5 cents per share as people scaled back on travel. Effects of the virus — which CEO Richard Fain called "that damn flu" during a conference call with investors — are expected to continue hurting the company during the third quarter and for the full year.

"Obviously, the economy continues to be a challenge, and the impact from the publicity surrounding H1N1 has been very frustrating," Fain said in a statement.

Revenue fell 15 percent to $1.35 billion, down from $1.58 billion a year ago. There were no one-time items.

Analysts polled by Thomson Reuters, who generally exclude one-time items from their estimates, predicted a loss of 13 cents per share on revenue of $1.36 billion.

Meanwhile Wednesday, the Miami-based company also offered forecasts for its third quarter and full year that were below analyst expectations: a profit between 95 cents and $1 per share for the third quarter and between 70 cents and 80 cents for the year.

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