MIAMI – Royal Caribbean Cruises Ltd. has announced a GAAP and adjusted earnings of US$1.06 and $1.09, respectively, up over 25% from last year and exceeding expectations.
In addition, full year adjusted earnings are expected to be up 25% in the range of $6.00 to $6.10, down $0.20 from the midpoint due to the negative impact of currency and fuel.
Yields and costs for the year are also performing generally as expected. The sale of 51% of the Pullmantur Group announced in May was completed at the end of July.
Consequently, Pullmantur’s results will no longer be consolidated in the company’s accounts.
Since Pullmantur’s yields and costs are lower than the fleet average, this change has the effect of increasing the company’s yields and costs metrics for 2016.
Second quarter 2016 results also found that the company’s adjusted net income was $235.2 million (or $1.09 per share), versus $185 million ($0.84 per share) in 2016, better than guidance due to lower than expected fuel expense.
As for the forecast for the full year in 2016, the company updated full year Adjusted EPS guidance to a range of $6.00 to $6.10. This is a $0.20 decrease at the midpoint versus previous guidance due to a $0.27 negative impact from currency and fuel rates, of which approximately $0.14 is related to weakness in the British Pound following the Brexit vote.
Lower than expected fuel expense in the second quarter partially offset the full year impact of weaker foreign currencies and rise in fuel prices.
The company’s booked position for the remainder of 2016 remains strong, similar to last year’s record levels. Looking further ahead, the company’s booked position for the next twelve months is also strong, up on both rate and volume, versus same time last year.
“While there are always puts and takes in our key markets, our portfolio is performing as expected, our booked position remains strong, and our newbuilds are entering their markets to great fanfare,” said Jason T. Liberty, chief financial officer.
“These factors are driving another year of record earnings.”