Royal Caribbean Cruises (RCL) has reported record first quarter results and updated its full year adjusted EPS guidance to a range of $9.65 to $9.85 per share.
This included the negative impacts of $0.25 related to the incident in the Grand Bahama Shipyard and about $0.25 as a result of a stronger dollar and higher fuel prices versus the January guidance.
The vast majority of these impacts were being offset by better first quarter results and an improved revenue outlook, RCL claimed.
For 1Q19, the company reported US GAAP earnings of $1.19 per share and adjusted earnings of $1.31 per share, beating the previous guidance, mainly due to higher revenue accrued.
US GAAP net income was $249.7 mill or $1.19 per share and adjusted net income was $275.8 mill or $1.31 per share. Last year, US GAAP net income was $218.7 mill or $1.02 per share, and adjusted net Income was $232.8 mill or $1.09 per share.
Gross yields were up 10.8% in constant currency (up 8.8% as reported). Net yields rose by 9.3% in constant currency and 7.2% as reported.
Net revenue yields in 1Q19 beat RCL’s previous guidance and are forecast to do so for the rest of the year. Overall, the company’s booked position remains at a record level in both rate and volume.
For the full year, net yields are expected to increase 7.5% to 9% in constant currency and 6.5% to 8% as reported. These metrics include about 350 basis points from the operation of Silversea, the new cruise terminal and the Perfect Day development.
On 1stApril, 2019, Royal Caribbean’s ‘Oasis of the Seas’ was undergoing maintenance at the Grand Bahama Shipyard when an accident involving the drydock caused two construction cranes to collapse on the stern of the ship.
The damage to the ship was extensive and the ship had to go to a dock in Europe for repairs (Navantia, Cadiz). As a result, she was taken out of service for almost a month and returned back to service on 5th May, 2019 sailing. RCL estimated the direct financial impact of the incident, net of insurance, will be a reduction of around $0.25 per share to the company’s full year adjusted EPS, mostly as a result of lost revenue.
“We are very pleased to report another record-breaking quarter and to be driving towards record earnings for the year,” said Jason Liberty, executive vice president and CFO. “The demand trends are strong, further exhibiting the strength for our brands and the public’s growing propensity to cruise.”
“It is exciting to see our team exceeding the very bullish revenue targets we established at the beginning of the year,” said Richard Fain, chairman and CEO. “We continue to see another great year in a long line of positive results driven by the continued strength of our brands.”
