NEW YORK (Reuters) - Royal Caribbean Cruises Ltd. posted an increase in quarterly earnings yesterday but lowered its full-year earnings forecast on higher fuel costs, sending its shares lower.

Royal Caribbean, the world's second-largest cruise operator after Carnival Corp. , said second-quarter net profit rose to $128.7 million, or 60 cents per share, from $122.4 million, or 57 cents per share, in the same quarter last year, boosted by cost-cutting and firmer pricing.

Revenues rose to $1.5 billion from $1.3 billion, as the addition of Spanish cruise line Pullmantur helped increase capacity by 12 percent.

Wall Street analysts, on average, were expecting Royal Caribbean to post earnings of 60 cents per share on revenue of $1.43 billion, according to Reuters Estimates.

The US-Norwegian cruise operator, which runs the Royal Caribbean and Celebrity cruise lines, said pricing stabilised in the quarter, especially in the previously weak Caribbean market. Net yields, a measure of average pricing, rose 0.9 percent.

"After a relatively slow start to the year, we are encouraged by the stabilised Caribbean pricing environment and the sound demand for our summer seasonal products," said chief executive Richard Fain in a statement.

While the recovery in demand reduces uncertainty, it doesn't make up for higher fuel prices.

"The demand and pricing side in the Caribbean has reduced the risk to future earnings," said Robert LaFleur, an analyst at Susquehanna Financial Group. "Unfortunately, fuel is actually a deduction from earnings."

Royal Caribbean said earnings in the second half would be burdened by a damaged ship and higher fuel prices.

The company forecast third-quarter earnings of $1.75 to $1.80 per share. The forecast includes a previously announced 14 cents-per-share charge related to a damaged ship.

For the full year, the company forecast earnings of $2.75 to $2.85 a share, which was adjusted to reflect higher fuel prices and the impact from the damaged ship charge. In May, the company forecast 2007 earnings of $3.05 to $3.20 per share.

Wall Street analysts, on average, had been expecting earnings of $1.97 per share in the third quarter and $3.02 for the year, according to Reuters Estimates.

Royal Caribbean shares were down nine cents to $40.47 in early afternoon trading on the New York Stock Exchange.