When Royal Caribbean International (NYSE:RCL) announced their 2Q 2011 Earnings they shocked everyone by admitting that their erred in their accounting. Upon hearing this, the stock plunged yesterday quite a lot. It should pick up today assuming it’s a good day for the market, but with the looming debt crisis, its gonna be a long ride uphill for the Miami based line.
Heres what they reported:
(1) Management identified an error in the previous accounting treatment of interest expense relating to its amortization of certain financing fees and has revised its past financial statements to reflect the correct accounting (the "Interest Expense Revision").
(2) Second quarter EPS was 47 cents before the Interest Expense Revision. After adjusting for the revision, the company reported earnings of 43 cents per share which is the midpoint of previous guidance range of 40 cents to 45 cents.
(3) Excluding the Interest Expense Revision, full year 2011 EPS guidance is now expected to be $3.05 to $3.15, reflecting a 10 cent reduction to prior guidance on continuing pricing softness for Eastern Mediterranean sailings, partially offset by strong cost savings. The Interest Expense Revision is forecasted to reduce 2011 EPS by 20 cents resulting in full year 2011 EPS guidance of $2.85 to $2.95.
(4) The Board of Directors reinstated the quarterly dividend at a rate of 10 cents per share.
you know, at least they admitted their error instead of burying it in other accounting figures that barely anybody understands *cough* Enron *cough*