Royal Caribbean Cruises has reported record second quarter results and reaffirmed its full year adjusted EPS guidance of $8.7 to $8.9 per share.
However, the company warned that this guidance included a $0.35 EPS negative impact from currency and fuel since the April guidance was issued.
This negative impact was offset by better second quarter 2018 results and an improved revenue outlook,RCL said.
For 2Q18, the company reported US GAAP earnings of $2.19 per share and adjusted earnings of $2.27 per share, beating guidance by $0.39 per share.
US GAAP net income for 2Q18 was $466.3 mill and adjusted net income was $482.2 mill, versus $369.5 mill for both or $1.71 per share, recorded in 2Q17.
Gross Yields were up 2.7% in constant-currency (up 3.7% as-reported). Net yields were up 2.8% in constant-currency (up 3.8% as-reported).
Gross cruise costs per APCD increased 1.1% in constant-currency (up 1.8% as-reported). Net cruise costs (NCC), excluding fuel per APCD, were up 1.1% in constant-currency (up 1.8% as-reported).
Net yields forecast for the full year are expected to increase 2.75% to 3.75% in constant-currency (up 3.25% to 4% as-reported).
NCC excluding fuel per APCD are expected to be up around 2.5% in constant-currency (up around 3% as-reported).
“While we are frustrated by foreign exchange and fuel rates, we are tickled pink that our business continues to excel and overcome these headwinds,” said Richard Fain, chairman and CEO. “It is a pleasure to prove, once again, how strong our brands are and to demonstrate continued upside to our yields while maintaining strong expense control.”
RCL beat the adjusted EPS guidance for 2Q18 by $0.39. Such a high level was described as unusual and was driven by many factors including: better than expected revenue from the global brands, better performance from the joint ventures and lower than expected expenses, which were driven by timing.
Bunker pricing net of hedging for the second quarter was $513.6 per tonne and consumption was 335.5 tonnes.
Since the last call, the company repurchased $300 mill in shares as part of its $1 bill repurchase programme authorised in May, 2018.
“2018 is shaping up to be another year of record earnings, which is being driven by a strong demand environment and effective cost and capital management,” said Jason Liberty, executive vice president and CFO. “While it is too early to guide on 2019, it is very encouraging to see these positive trends further supporting a strong book of business for next year.”
For the third quarter of this year, constant-currency net yields are expected to be up by about 2%. NCC excluding fuel for 3Q18 is expected to be down around 1% in constant-currency.
Based on current fuel pricing, interest and currency exchange rates, and the factors detailed above, the company expects third quarter adjusted EPS to be in the range of $3.9 to $3.95 per share.
