Royal Caribbean Cruises' Stock Crashed On Tuesday Due To Poor Guidance

Shares of Royal Caribbean Cruises Ltd (NYSE: RCL) were trading lower by more than 16 percent mid-Tuesday afternoon, as investors were not pleased with the company's fourth-quarter results and outlook.

Royal Caribbean said that it earned $0.94 per share in the fourth quarter on revenue of $1.902 billion. Wall Street analysts were expecting the company to earn $0.92 per share on revenue of $1.96 billion.

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Adjusted net income for the quarter rose to $206.8 million from $70 million a year ago due to stronger demand in the Caribbean and new China sailings in the winter. Net income for the full fiscal year 2015 rose to $1.07 billion from $755.7 a year ago.

Royal Caribbean also issued full-year fiscal 2016 guidance and expects to earn $5.90 to $6.10 per share – short of the $6.27 per share Wall Street analysts were already estimating. The company stated that the continued strength in the U.S. dollar resulted in a negative $0.14 impact to earnings per share in 2016. In addition, interest rates have recently increased, which is causing a negative impact of $0.06 per share to earnings.

Finally, Royal Caribbean stated that there is a "lag" before any benefits from low fuel prices flows through to the business.

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