The Maritime Executive reported today that all persons or entities who purchased Royal Caribbean securities from April 23, 2009 through and including July 27, 2011 ("Class Period") have filed a class action lawsuit against Royal Caribbean Cruises Ltd. and certain of its officers, alleging violations of Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. Sections 78j(b) and 78t(a); and SEC Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. Section 240.10b-5.
The Complaint alleges that throughout the Class Period, defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the company's business, operations, and prospects. Specifically, the defendants are alleged to have made false and/or misleading statements and/or failed to disclose that: (1) the company improperly accounted interest expenses related to the amortization of certain financing fees related to certain of the company's export credit agency guaranteed loans; (2) the company lacked adequate internal and financial controls; and (3) as a result of the foregoing, the company's statements were materially false and misleading at all relevant times.
On July 27, 2011, after the market closed, the company disclosed "an error in the previous accounting treatment of interest expense relating to its amortization of certain financing fees and has revised its past financial statements to reflect the correct accounting." As a result of the "error," the plaintiffs allege that the company admitted that it had overstated the earnings per share ("EPS") for 2009, 2010, and the first quarter of 2011 by $0.05, $0.15 and $0.06, respectively. The company has reduced its full-year earnings guidance by $0.10 per share excluding the "error," and by an additional $0.20 per share upon correcting the "error," rending the company's new outlook for 2011 EPS to a range of $2.85-$2.95, down from a previous range of $3.10-$3.30.
On this news, the company's shares declined $4.50 or more than 12.5% and closed at $31.26 the following day.
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