(Bloomberg) ? Royal Caribbean Cruises Ltd., the world?s second-biggest cruise operator, said profit dropped 21 percent on higher fuel prices. The company cut its full-year forecast.

Net income in the second quarter fell to $122.4 million, or 57 cents a share, from $155.2 million, or 72 cents, a year earlier, the Miami-based company said today in a statement. Sales rose 7.5 percent to $1.29 billion from $1.2 billion. Royal Caribbean had forecast profit of as much as 55 cents a share.

Chief Executive Officer Richard Fain this quarter launched Freedom of the Seas, the world?s largest cruise ship. Royal Caribbean is betting that vessel?s features, including a surfing simulator and rock-climbing wall, will counter the impact of higher oil prices and weaker demand for Caribbean cruises that reduced profit at larger rival Carnival Corp.

?I am seeking to learn more about the second-half outlook in light of their guidance for the full year,? said David Leibowitz, managing director at New York-based Burnham Securities Inc., which has owned shares in both companies.

Royal Caribbean forecast 2006 profit of as much as $3 a share, down from an April prediction of $3.15, because of higher costs for bunker fuel. Analysts estimate $2.93. Revenue per passenger per day will be three percent to four percent, unchanged from an April forecast.

Shares of Royal Caribbean, which operates the Royal Caribbean International and Celebrity lines, fell $1.74, or 4.8 percent, to $34.31 at 10:47 a.m. in New York Stock Exchange composite trading. The stock has dropped 23 percent this year before today.

William Blair & Co. analyst Bob Simonson in Chicago, who is top-ranked for accuracy by StarMine Professional, estimated profit of 53 cents a share. He rates the stock ?market perform.? His estimate matches the average of 15 analysts surveyed by Thomson Financial, which doesn?t disclose the basis of its estimates to Bloomberg News.

Royal Caribbean has seen some ?softening in the competitive environment? for the rest of 2006, Fain, 58, said today during a conference call with investors and analysts. Reservations aren?t being booked as far in advance in the Caribbean and Bermuda, he said.

Carnival last month said fiscal second-quarter profit fell 2.1 percent because of a rise in fuel costs. The company said there has been ?considerable softness? in Caribbean bookings for the second half of the year.

Second-quarter revenue per passenger per day, or net yield, climbed 6 percent, higher than its previous forecast of 5 percent. This figure excludes some expenses such as travel agent commissions. Ticket revenue increased 7.3 percent to $952.9 million and passengers spent more onboard on gourmet meals and spas.

Royal Caribbean said costs excluding commissions, transportation and other items rose 14 percent. The company?s average fuel price increased 36 percent from a year earlier to $460 per metric ton and was higher than its forecast of $432.

The company also had expenses to launch the Freedom of the Seas and refurbish ships.

Prices for cruises to the Caribbean and Mexico are weakening while Alaska and Europe prices remain strong, according to a June survey of travel agents conducted by Susquehanna Financial Group analyst Robert LaFleur. One-third of the 114 agents surveyed reported higher prices in the Caribbean. That is the lowest percentage since the poll began in August.

Carnival last month said demand was weakest for Caribbean cruises of three to five nights. Many passengers for these voyages are first-time cruisers and more likely to be affected by higher gasoline prices, said LaFleur, who is based in Stamford, Connecticut.

Crude oil rose 10 percent during the second quarter, climbing as high as $75.35 a barrel on the New York Mercantile Exchange.

Negative news such as hurricanes and the tilting of a Carnival Crown Princess ship earlier this month may also weigh on first-time cruisegoers, said LaFleur. Royal Caribbean had costs to repair a hurricane-damaged port in Cozumel, Mexico.

US forecasters have said the 2006 Atlantic Ocean hurricane season, which began June 1, may generate an above- average number of storms. Last year?s season set a record with 15 hurricanes, topping the 12 recorded in 1969.

?There is a clear softness in the Caribbean,? LaFleur said in a July 25 interview. ?The question no one has the answer to is is this a broad-based Caribbean dilemma affecting everyone or does the issue disparately affect Carnival.?

Royal Caribbean doesn?t offer as many shorter-duration cruises, three to five days, as Carnival and can command higher fares on the Freedom and Voyager class ships, said Leibowitz.

The company, which operates 29 ships, has six vessels under construction, including the world?s biggest cruise liner by passenger capacity when it is delivered in 2009.

That vessel will be almost as long as four football fields and carry 5,400 passengers. Three of the ships under construction are for Royal Caribbean?s more upscale Celebrity line.

Among analysts tracked by Bloomberg, 16 rate Royal Caribbean shares ?buy? and 11 say ?hold.? Before today, results had beaten analysts? estimates in the four prior quarters.

About 11.7 million passengers will take a cruise in 2006, a 4.5 percent increase from 2005, according to Cruise Lines International Association, a New York-based trade group.