The seas are still rough for Royal Caribbean Cruises Ltd. (RCL), but they're not as rocky as expected.

The company swung to a narrower-than-expected first-quarter loss as consumers continued to spend less on discretionary items like vacations. But the second largest cruise ship operator by market share behind Carnival Corp. (CCL) found some encouragement in cruise booking patterns, which are continuing to stabilize.

The cruise line company also cut its 2009 earnings forecast by a nickel to $1.35 a share, while analysts recently were looking for a steeper decline to 97 cents, according to Thomson Reuters.

Royal Caribbean's shares were up 21% to $13.81 in recent early trading. Through Wednesday, the stock was down two-thirds in the past year.

With a steadier booking outlook and financing related to ship orders settled, Susquehanna Financial Group analyst Robert LaFleur said a lot of negative overhang on Royal Caribbean's stock are gone. He expects a "very strong day today."

Last week, Royal Caribbean announced it had arranged funding commitments for 80% of the price of its new Oasis of the Seas cruise ship, expected to launch in December. Previously a concern, the announcement encouraged investors that the company could still get financing despite the tough environment.

Chief Financial Officer Brian J. Rice said booking patterns have stabilized further since January, when they began to regain their footing, but a great deal of uncertainty remains. Discounting remains aggressive, he noted.

"We are obviously not completely back to equilibrium yet, but the predictability of our bookings gets better every day," Rice said.

Cruise lines' profits fell last year, but not as far as those of some major hoteliers. Some analysts say cruise lines may be in relatively good shape compared to other travel companies, owing to their pricing and itinerary flexibility.

Royal Caribbean - whose brands also include Celebrity - reported a net loss of $36.2 million, or 17 cents a share, compared with prior-year net income of $75.6 million, or 35 cents a share. The company in January projected a loss of 30 cents to 35 cents.

Revenue decreased to $1.33 billion, as ticket revenues and amount spent onboard both fell. Analysts most recently expected $1.31 billion.

Operating margin fell to 28.2% from 32.7% despite fuel costs declining 2%. Net yields, or revenue per available passenger cruise days, fell 13.5% - slightly less than the drop projected in January. The second quarter's figure is seen falling 17%, or 12% on a constant currency basis.

For the year, the company expects net yields to be toward the lower end of its prior guidance of a 12% to 13% drop.

-By Kelly Nolan; Dow Jones Newswires; 201-938-4049; kelly.nolan@dowjones.com

(Tess Stynes contributed to this report.)