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How Royal Caribbean’s earnings report translates into deals for you

Royal Caribbean recently reported its fourth quarter earnings for 2006. I’m neither an accountant nor an MBA, so the numbers are somewhat over my head. However, I can interpret the comments made by Richard Fain, Royal Caribbean’s chairman and CEO. Here’s how his convoluted business language translates into information the average cruiser can understand.

Fain: “Royal Caribbean International and Celebrity Cruises grew yields 3.4 percent for the full year 2006. This is at the high end of our original expectations, and is a testament to the strength and momentum of our brands, particularly given a Caribbean pricing environment that is less robust than we had hoped.”

Translation: Royal Caribbean and Celebrity did well last year, despite a decline in interest in Caribbean cruises. If you’re looking for cheap fares for a sailing on one of these lines, you’ll find them on Caribbean voyages.

Fain: “The early indications from the ‘wave period’ are less encouraging than we had hoped.”

Translation: Most cruise lines sell a large percentage of cabins during wave season, typically between January and March. A weak wave season means more close-in deals as the cruise lines try to fill the remaining cabins they didn’t sell at the beginning of the year.

Fain: “We have seen the usual uptick in volume, while pricing appears to have leveled off from the healthy appreciation we have seen over the last few years.”

Translation: Cruise prices haven’t gone up much since last year—good news for consumers.

Fain: “Coming off a great year, we are encouraged by the prospects of solid earnings accretion in 2007, despite a leveling off in pricing in the early part of the year.”

Translation: Cruises are cheap this winter. If you want a great last-minute deal, book now. If bookings pick up in the latter half of the year, cruise fares will increase along with them.

If I’m interpreting correctly, Royal Caribbean is optimistic about its earnings potential for the coming year, while still leaving plenty of great cruise deals for consumers. That’s what I call a win-win situation.

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