<p>Shares of Royal Caribbean Cruises Ltd. were down 6.82 percent shortly before noon after the company said it would expect a small loss in the fourth quarter.</p>
<p>The Miami-based cruise company (NYSE: RCL) reported third quarter profits of $230.4 million, or $1.07 a share, down 44 percent from $411.9 million, or $1.92 a share, in the year-ago quarter. Shares were down $1.41 to $19.26. Royal Caribbean's 52-week range is $5.40 to $25.02.</p>
<p>Miami-based Carnival Corp. (NYSE: CCL) was down 66 cents, or 2.24 percent to $29.05. Carnival is the world's largest cruise company, and Royal Caribbean is No. 2.</p>
<p>Royal Caribbean beat its own forecast of 95 cents to $1 a share &ndash; and the $1 average estimate by 17 analysts on Yahoo Finance. However, Royal Caribbean is still feeling the impact of the overall economy, particularly in Florida.</p>
<p>"Like many other travel companies, we saw more strength than we expected during our peak season, but have been experiencing more pricing pressure on some of our traditionally softer fall season sailings," Chairman and CEO Richard D. Fain said in a news release. "Overall, though, the business environment is largely unchanged and stable. We expect the yield deficit to continue to improve in the fourth quarter and we remain optimistic that 2010 will bring year-over-year yield improvement."</p>
<p>Royal Caribbean expects profits of about 70 cents a share for the year as it continues to deal with the soft economy. That is about 4 cents below the average forecast of analysts.</p>
<p>However, there are signs the cruise industry is in much better shape than a year ago, when Wall Street was in the middle of a collapse.</p>
<p>Royal Caribbean reported that passenger bookings since mid-September are up about 40 percent, year-over-year, reflecting cruises that depart in the fourth quarter and next year.</p>
<p>"While the pricing environment is still not what we'd like it to be, we're pleased to see solid growth in our order book and a rapidly diminishing gap in year-over-year booked volume comparisons," said Brian J. Rice, Royal Caribbean executive vice president and chief financial officer, in a news release.</p>
<p>During a conference call with analysts, Rice said the load factor for Royal Caribbean is probably down in the low single digits for the fourth quarter of 2009 and first quarter of 2010, but the load factors are more equal as the year goes out.</p>
<p>Royal Caribbean is hesitant to give more specific guidance, but "we do anticipate that we will have higher load factors in all quarters," he said.</p>
<p>Rice is looking forward to December and January to make more accurate comparisons due to different seasonality and product mixes.</p>
<p>January generally marks the start of cruise lines' "wave season," when they generally offer some of their best deals of the year and get strong bookings.</p>
<p>Cruise companies in general saw their pricing models devastated during the economic downturn. They usually offer the best prices to passengers who book far in advance, but the economy sparked rampant discounting closer to cruise departure times.</p>
<p>Royal Caribbean expects fourth quarter net yields to drop 7 percent to 8 percent, slightly worse than its previous forecast of down by the mid-single digits.</p>
<p>"During the fourth quarter, we historically source a disproportionate number of our guests from Florida," Rice said. "As a consequence of the weaker economy in the state, we do not anticipate the same strength of close-in bookings in the fourth quarter as we saw in the third quarter."</p>
<p>Royal Caribbean noted that its new ships &ndash; the Oasis of the Seas and Celebrity Cruises&rsquo; Solstice-class vessel &ndash; continue to command significant price premiums and volumes.</p>
<p>Last week, Royal Caribbean took delivery of Oasis of the Seas and, on Tuesday morning, the ship sailed out of Southampton and back into the English Channel after dropping off some workers. The Oasis is scheduled to arrive at Port Everglades on Nov. 11.</p>
<p>Some cruise industry observers have questioned why berths are still available on Oasis of the Seas, given the hoopla over its inaugural cruises.</p>
<p>Adam Goldstein, president of Royal Caribbean International, told analysts not all of the rooms on Oasis are part of the inventory for the early cruises, partly because the staff needs to master operations.</p>