Royal Caribbean shares fall amid fuel-cost and financing concerns
The cruise company’s stock declined 3.1% as investors weighed higher oil prices, recent debt financing and booking pressures on selected itineraries.
Royal Caribbean Group shares were down 3.1% for the day, according to the report. Its analysis attributed the movement primarily to broader pressure on cruise operators, as rising oil prices prompted concern about fuel expenses.
The report also pointed to investor scrutiny of Royal Caribbean’s recent financing. The company said on Aug. 20 that it completed a $1.25 billion offering of senior unsecured notes carrying a 5.550% interest rate and maturing in 2034. Royal Caribbean said proceeds were intended to repay floating-rate term loans and other debt.
The decline followed a strong late-July quarterly update, the report said. Royal Caribbean’s adjusted earnings surpassed expectations, and the company increased its guidance for the full year. The analysis therefore did not link the share-price drop to a newly reported weakening in the company’s core performance.
Investors may also have been considering management’s comments about demand. According to the report, executives said prolonged geopolitical activity had produced a modest impact on bookings for certain itineraries.