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Royal Caribbean steers course for higher earnings
American cruise company Royal Caribbean reported record first quarter results on Thursday, leading the Floridian firm to up its full-year adjusted earnings estimates.
Royal Caribbean generated revenue of $2.03bn in the first three months of the year, which was 1.0% more than a year ago but was $10m short of what Wall Street analysts were expecting.
made an adjusted net income of $232.8m, or $1.09 per share, an increase of around 8.4% on a year ago which led the company to re-forecast its full-year adjusted earnings to be in the range of $8.70-8.90 per share, up $0.15 from its initial guidance. EPS beats the Street forecast by $0.13.
Gross yields, which measures total revenue per available passenger cruise day, were up 3.1% as demand for Royal Caribbean's core products came in "as expected", and a "better-than-anticipated" usage of its "experiential" onboard products and activities helped push net onboard revenue yields ahead by 6.3% on a constant-currency basis.
The group operates the largest passenger ship ever built, the five-times-the-size-of-the-Titanic Symphony of the Seas, as well as the world's second-, third- and fourth-largest cruise ships.
"We are delighted to report another record-breaking quarter and to be driving towards record earnings for the year, above our initial guidance," said Jason Liberty, executive vice president and chief financial officer.
"Revenues continue to excel and expenses, even including some new demand generating initiatives, continue to be carefully controlled," Liberty added.
Gross cruise costs increased 5.0% at constant-currency, while net cruise costs, excluding fuel, were up 11.2%, higher than Royal Caribbean's guidance, driven by "timing".
During the quarter, Royal Caribbean completed its $500m share repurchase program authorized a year ago.
"This year is proving to be another strong year with all our brands firing on all cylinders," said Richard Fain, Royal Caribbean's chairman and chief executive.
"The market continues to support our growth as our people keep focused on delivering our targets and goals. The strength of this market plus our new ships in 2018, position us nicely for 2019 as well," he added.
As of 1620 BST, shares had lost 1.8% to $116.21 each.