Share price as of Monday's close:

$9.15

Share price now:

$10.43

Change:

14%

Volume:

4.4 million shares, daily average 1.94 million shares

Last time this high:

Oct. 4, 2001

52-week high:

$30.25

52-week low:

$7.75

Forward P/E before announcement:

16.94

Forward P/E after announcement:

24.83

SOMEWHERE, Captain Stubing is smiling.

The Sept. 11 terrorist attacks were supposed to devastate the leisure-travel business across the board. But on Tuesday, Royal Caribbean Cruises, the world's second-largest cruise operator, posted a profit of 82 cents a share for the third quarter, beating Wall Street's consensus estimate by 10 cents. Sure, that figure was far less than last year's $1.04 a share. And, yes, the attacks had a major effect on business, lopping 19 cents off the quarterly bottom line, all told. But business snapped back sharply during the first 20 days of October, sending bookings to within 98% of last year's totals. That buoyancy sent Royal's stock surging 14% on Tuesday.

Investors had reason to be nervous before the earnings report. Last week, industry leader Carnival warned that the attacks would bash its bookings down to 75% of the prior year's totals. So how has Royal managed to stay afloat? It's aggressively cutting prices, thereby sparking demand. It also promised to slice a total of $700 million from its capital-expenditures budget in 2002 and 2003.

Quote
"We are confident that the steps we are taking will make us a stronger corporation and keep our focus where it needs to be on the future," said Richard Fain, Royal Caribbean's chairman and chief executive, in a statement. "The cost-cutting measures in our shore-side operations combined with the superior quality of our onboard product will enable us to weather this storm."