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.

"The most of remarkable news about the quarter and about our outlook is that we have a very little new to report overall; the year's developing pretty much in-line with what we said three months ago," Chairman and Chief Executive Richard Fain said in the company's earnings call.

Royal Caribbean's shares were up 9.6% to $12.50 in recent trading. Through Wednesday, the stock was down two-thirds in the past year.

With steadier booking patterns and financing related to ship orders settled, Susquehanna Financial Group analyst Robert LaFleur said a lot of negative overhang on Royal Caribbean's stock is 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 the fourth quarter. Previously a concern, the announcement encouraged investors that the company could still get financing despite the tough environment.

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

Passengers continue to book trips closer to sail date, spend less onboard, especially on art auctions and gambling, and prefer shorter, cheaper trips to the Caribbean over longer sails to Europe.

People also are looking to sail closer to home, with three-fourths of Royal Caribbean's European passengers hailing from the continent, the company said in the call.

Discounting remains aggressive, with CEO Fain calling pricing "miserable" in the call. He did not elaborate how much cruise prices have been discounted, but said the pricing hair cuts remained within the company's expectations.

Also, price cuts have leveled off in the past few months, and there has been a slight uptick in people booking trips recently three to six months ahead, CFO Rice said in the call.

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

Zacks Investment Research analyst Sean P. Smith found the company's results encouraging, although he noted Royal Caribbean still would still face challenges ahead.

Still, "this report could mark the beginning of stabilization for the company's operations," Smith 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.)