Royal Caribbean Cruises barely got out a fourth-quarter profit of a penny a share, a 98 percent decline in profits from a year earlier and well below Wall Street expectations.

The Miami-based cruise giant said it expects to lose money in the first quarter, with all of 2009 shaping up to be less profitable than previously expected.

The cruise industry has been resorting to deep discounts to lure consumers. Once passengers get onboard, they are stingier at casinos and shops, and to a lesser degree, in spending on other extras such as spas, further curtailing profits. Consumers also are booking much closer to sailing dates, making it harder for the cruise operator to plan ahead.

Shares of Royal Caribbean, the No. 2 cruise operator, fell 13 percent to $7.85 on the New York Stock Exchange Thursday after sliding sharply the day before. Royal Caribbean's stock is down 76 percent since the economy fell off a cliff in mid-September.

No. 1 Carnival Corp., which has maintained profits better and has a stronger balance sheet, fell 7 percent to $18.60; it has seen its stock slide 52 percent since mid-September.

Royal Caribbean, which operates five brands including Celebrity Cruises and Azamara Cruises, posted fourth-quarter net income of $1.5 million, or one cent a share, compared to $70.8 million, or 33 cents per share, a year earlier. For all of 2008, it posted net income of $573.7 million, or $2.68 a share, down 5 percent from $603.4 million, or $2.82 a share, for 2007.

Royal Caribbean expects its yield -- the revenue a berth generates in a day -- to plunge a dramatic 14 percent to 16 percent for the first quarter and 9 percent to 13 percent for the full year. The cruise operator projected a loss of 30 cents to 35 cents a share for the first quarter and a profit of around $1.40 per share for the full year.

Royal Caribbean executives said they are responding by cutting costs even deeper than in a plan made last fall. The company is casting a wider net to draw more consumers from Europe, Asia and Latin America.

The company also has stepped up incentives to travel agents, temporarily boosting commissions and offering consumers a host of come-ons, like cabin upgrades and on-board credits. Many cruise prices are reminiscent of 2002 when the industry was scrambling to overcome consumers' reluctance to travel in the wake of the Sept. 11, 2001, terror attacks.

Royal Caribbean said cruise bookings to Europe and Alaska are the hardest hit. Stewart Chiron, a Miami cruise expert, said the cruise industry isn't doing enough to lure travelers on those itineraries. ''They're going to have to offer free or reduced airfare,'' he said. Wall Street analysts peppered executives with tough questions during a Thursday conference call. One concern: Royal Caribbean has yet to nail down financing for its much-touted Oasis ships that will be the world's largest when they begin service in December 2009 and in 2010