Royal Caribbean’s Q1 Profit Beats Forecast
New York-listed cruise line company Royal Caribbean Cruises reported adjusted first quarter earnings worth USD 124 million or USD 0.57 per share –nearly tripling last year’s results that stood at USD 45.2 million and almost doubling previously provided guidance, the company said.
US GAAP net income was USD 99.1 million or USD 0.46 per share, versus USD 45.2 million or USD 0.20 per share in 2015, beating projected earnings of 32 cents per share from the Wall Street.
Strong close-in demand on Caribbean sailings and better onboard revenue are said to have driven the improvement in net yields which were up 7% on a constant-currency basis, 300 basis points better than guidance.
As a result, the company increased its outlook for the full year raising its full year earnings guidance by USD 0.25 per share to USD 6.15 to USD 6.35, with net yields expected to increase 2.5% to 4.0%.
“What an exciting quarter in an exciting year,” said Richard D. Fain, chairman and chief executive officer. “Our brands continue to excel and produce gratifying results. This year’s performance further solidifies our base for the Double-Double.”
The company continues to implement its USD 500 million share repurchase program and has repurchased USD 450 million worth of shares.
In terms of demand, overall, RCL said that its booked position remains strong, similar to last year’s record high levels.
However, China is a closer-in booking environment making it harder to compare positions. Excluding China bookings, the company’s booked position is well ahead of last year’s, RCL added.
In addition, the cruise liner explained that strong first quarter revenue results, combined with strong demand trends for North American products is more than offsetting weaker demand for Mediterranean sailings from the North American consumer.
“The first quarter has given our year momentum, which is more than offsetting some headwinds from the Mediterranean,” said Jason T. Liberty, chief financial officer. “This performance is positioning us for the highest earnings in company history.”