Fuel costs hit Royal Caribbean; Cutting 400 jobs

Royal Caribbean earned $84.7 million, or 40 cents a share, in line with Wall Street expectations. In the same period a year ago it earned $128.7 million, or 60 cents a share.

Although demand for cruises remained high in the quarter, fuel prices soared 55 percent. As a result, the company said it would take several steps to cut costs by about $125 million including eliminating jobs.

"Too much of our profitability is being eroded by the increase in fuel prices," CEO Richard Fain said in a statement. "This is unacceptable and we are evaluating everything we do to find ways to do it more efficiently and effectively."

Royal Caribbean will eliminate approximately 400 shore-side positions. It also is getting rid of some non-core operations, such as "The Scholar Ship," an educational program for college students to study abroad at sea.

The company expects to incur approximately $15 million, or 7 cents a share, in charges in the third quarter related to restructuring.

Royal Caribbean said it expects third quarter earnings per share, including the restructuring charges, to be $1.65 to $1.70, nearly unchanged from earlier forecasts except for the direct increase in fuel costs.

Shares of the company closed at $22.70 and remained unchanged in after-hours trading.