Royal Caribbean Q1 Earnings Trend Up

Royal Caribbean Cruises today reported first quarter results and increased its outlook for the full year. 

Continuing on its Double-Double trajectory, the company’s Adjusted first quarter earnings were $0.57 per share –nearly tripling last year’s results and almost doubling previously provided guidance.  The company increased its full year earnings guidance by $0.25 per share to $6.15 to $6.35.

Results for the First Quarter 2016:

•    Net Yields were up 7.0% on a Constant-Currency basis (up 3.4% As-Reported), 300 basis points better than guidance. Strong close-in demand on Caribbean sailings and better onboard revenue drove the improvement. 

•    Net Cruise Costs (“NCC”) excluding fuel increased 4.7% on a Constant-Currency basis (up 3.6% As-Reported), which was in line with guidance. 

•    Adjusted Net Income was $124.0 million or $0.57 per share, versus $45.2 million, or $0.20 per share in 2015. 

•    US GAAP Net Income was $99.1 million or $0.46 per share, versus $45.2 million or $0.20 per share in 2015.

Full Year 2016:

•    Overall, the company’s booked position remains strong, similar to last year’s record high levels. 

•    Adjusted EPS is expected to be in the range of $6.15 to $6.35 per share – $0.25 higher than previous guidance. The increase is mainly driven by strength in North American products and onboard revenue trends as well as stronger foreign currencies. 

•    Net Yields are expected to increase 2.5% to 4.0% on a Constant-Currency basis (up 1.3% to 2.8% As-Reported). 

•    NCC excluding fuel are expected to be up approximately 1.0% on a Constant-Currency basis (up 1.0% or less As-Reported).

The company continues to implement its $500 million share repurchase program.  Since the program was announced in October 2015, the company has repurchased $450 million worth of shares.

“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.”


Adjusted Net Income for the first quarter of 2016 was $124.0 million, or $0.57 per share, compared to Adjusted Net Income of $45.2 million, or $0.20 per share, in the first quarter of 2015. Strong close-in demand for the Caribbean combined with better than expected onboard spend in beverage and internet drove the majority of the outperformance.  Foreign exchange and fuel contributed $0.08 to the upside.

US GAAP Net Income for the first quarter 2016 was $99.1 million or $0.46 per share compared to $45.2 million or $0.20 per share in 2015. As previously announced, the company eliminated the two-month reporting lag related to their Pullmantur brand in the first quarter. 

This resulted in a one-time catch up of approximately $0.10 loss per share which, as previously discussed, has been removed from key statistics for 2016.

Net Yields on a Constant-Currency basis increased 7.0% during the quarter. Constant-Currency NCC excluding fuel increased 4.7%. Bunker pricing net of hedging for the first quarter was $511 per metric ton and consumption was 344,000 metric tons. 


The company has updated full year Adjusted EPS guidance to a range of $6.15 to $6.35 from $5.90 to $6.10.  Foreign exchange net of fuel is contributing approximately $0.15 to full year earnings.  

The company’s booked position is similar to last year’s record 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.

Constant-Currency Net Yields are expected to be in the range of up 2.5% to 4.0%.  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.”

Net Cruise Costs excluding fuel are expected to be up approximately 1.0% on a Constant-Currency basis.

Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects 2016 guidance for Adjusted EPS to be in the range of $6.15 to $6.35 per share. 


Constant-Currency Net Yields are expected to increase approximately 1.0% in the second quarter of 2016. Various customary factors skew comparisons between quarters such as an early Easter shifting Holy Week sailings into the first quarter in 2016 and the timing of new ship deliveries.  NCC excluding fuel are expected to be up approximately 2.0% on a Constant-Currency basis. Based on current fuel pricing, interest rates and currency exchange rates, the company expects second quarter Adjusted EPS will be approximately $1.00 per share.

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