What happened

Shares of cruise line Royal Caribbean Cruises (NYSE:RCL) jumped as much as 7.1% in trading Wednesday after the company reported fourth-quarter 2018 results. At 2:15 p.m. EST, shares were hitting their high for the day.

So what

Revenue for the quarter was up 16.4% to $2.33 billion, and net income was up 9.6% to $215.7 million, or $1.50 per share. Stronger revenue was driven by a 7.3% increase in yields on a constant currency basis. Revenue beat analyst estimates of $2.31 billion, and adjusted earnings per share of $1.53 beat estimates by $0.02.

Cruise liner near an island.

Image source: Getty Images.

The operating improvement is expected to continue in 2019, with management guiding for $9.75 to $10.00 per share in adjusted earnings, up from $8.86 in 2018. A net yield increase of 6.5% to 8.5% is expected to drive the improvement in results.

Now what

Royal Caribbean management said bookings for 2019 are even higher than a year ago, which was a record, and they're charging higher prices. A strong economy is helping with demand and giving customers extra discretionary spending for cruises. And it doesn't hurt that fuel prices are down significantly since the last time Royal Caribbean reported earnings. Unless an economic slowdown hits demand, 2019 looks to be a great year for the cruise line industry.

Check out the latest Royal Caribbean earnings call transcript.

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