OK, there's probably no need to send out a mayday distress call just yet, but Royal Caribbean
Fortunately, the company was in a good position to weather the storm. Year-to-date revenues and earnings were up 24% and 66%, respectively, going into the final three months, so despite the fourth-quarter shortfall (which included a one-time $8.1 million loss), full-year earnings still increased nearly 60% to $2.26 on revenues that advanced 20% to $4.6 billion.
Those gains were fueled by some fairly impressive growth rates in key industry metrics, such as net yield -- a core measure of occupancy and cabin rates that strips out airfare and travel agent commissions. For the year, Royal Caribbean's net yields climbed 9.2% higher, setting a new record. Occupancy was also healthy, rising to 105.7% (indicating some cabins held more than the standard two passengers), despite a double-digit increase in capacity.
Next year the company is anticipating only a slight 1.6% rise in capacity, and if early booking trends are any indication, those cabins are likely to be filled with eager seagoing vacationers. Through the first three weeks of the industry's "wave period" -- when ticket sales accelerate at the beginning of the year -- demand is running at levels not seen since the industry peaked in the late 1990s. With that tailwind in place, management is forecasting full-year earnings to rise to a range between $2.70 and $2.90.
Today's unexpectedly weak fourth-quarter results, which missed estimates by a nautical mile, have shares of Royal Caribbean underwater this morning. Industry leader Carnival
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Fool contributor Nathan Slaughter has yet to experience his first cruise but has begun saving for a sailboat. He owns none of the companies mentioned.