RCL Outperforms Expectations for Q1
Royal Caribbean Cruises Ltd. (RCL) today reported US GAAP and adjusted net income for the first quarter of 2017 worth USD 214.7 million, outperforming the company’s guidance for the period.
This is a considerable increase when compared to US GAAP net income of USD 99.1 million and adjusted net income of USD 124.0 million in the first quarter of 2016.
RCL said the results were driven predominantly by the strong close-in demand for the Caribbean. Net yields on a constant-currency basis increased 6% during the quarter.
For the second quarter of the year the cruise liner said that it expects constant-currency net yields to increase 10.0% to 10.5% amid strong demand for European and North American products, the deconsolidation of Pullmantur and new hardware.
As a result, the company has updated full year adjusted earnings to a range of USD 7.00 to USD 7.20 from USD 6.90 to USD 7.10.
“Overall, the year has developed very much along the trajectory the company projected at the beginning of the year. Bookings started the year on a very strong note and continued to please. This strong demand for cruises generally has offset the recent headwinds from the disrupted Korean sailings mainly during the second and third quarters,” the company said.
The company also announced today board authorization for a USD 500 million share repurchase program.
“We continue to execute on our core financial objectives: improving shareholder returns, being an investment grade credit and moderately growing our business,” said Jason T. Liberty, executive vice president and CFO.
“Over the past five years, we have increased our dividends fivefold, repurchased close to USD 750 million in common stock to date and have now reached investment grade.”
Last week the company achieved the status of an investment grade company with Moody’s announcement improving the company’s credit rating to Baa3 with a stable outlook.
Royal Caribbean Cruises owns and operates three global brands: Royal Caribbean International, Celebrity Cruises and Azamara Club Cruises, and has stakes in three German TUI Cruises, Spanish Pullmantur and the Chinese brand SkySea Cruises. Together, these brands operate a combined total of 48 ships with an additional thirteen on order.