oyal Caribbean Cruises Ltd. (NYSE: RCL) today reported 2017 US GAAP and adjusted earnings of $7.53 per share — beating the Double-Double EPS target and the mid-point of previous guidance by $0.75 and $0.16, respectively.  In addition, the company announced that 2018 adjusted earnings are expected to be in the range of $8.55 to $8.75 per share.

KEY HIGHLIGHTS

Full Year 2017:

  • US GAAP and Adjusted Net Income were $1.63 billion or $7.53 per share. Last year, US GAAP Net Income was $1.28 billion, or $5.93 per share, and Adjusted Net Income was $1.31 billion, or $6.08 per share.
  • Gross Yields were up 5.7% on a Constant-Currency basis (up 5.9% As-Reported). Net Yields were up 6.4% on a Constant-Currency basis (up 6.5% As-Reported).
  • Gross Cruise Costs per APCD increased 1.9% on a Constant-Currency and As-Reported basis. Net Cruise Costs (“NCC”) excluding Fuel per APCD were up 2.0% on a Constant-Currency and As-Reported basis.

Full Year 2018 Outlook:

  • Adjusted earnings are expected to be in the range of $8.55 to $8.75 per share.
  • Net Yields are expected to increase 1.5% to 3.5% on a Constant-Currency basis (up 2.75% to 4.75% As-Reported).
  • NCC excluding Fuel per APCD are expected to be up 1.5% to 2.0% on a Constant-Currency basis (up 2.0% to 2.5% As-Reported).

FULL YEAR 2017

US GAAP and Adjusted Net Income for the year were $1.63 billion or $7.53per share.  This result beat the January 2017 mid-point guidance by $0.53 or $115 million and equates to a 23.8% year-over-year growth in earnings per share.  This result was achieved despite an unusually ferocious hurricane season which hurt earnings by approximately $55 million or $0.26 per share.

“Our teams worked hard to achieve the Double-Double goals and now they have done it”, said Richard D. Fain, chairman and CEO.  “Each of the brands performed excellently during the past year raising their guest satisfaction and employee engagement scores to new heights.  This augurs well as we focus on our previously announced 20/20 Vision.”

Net Yields increased 6.4% on a Constant-Currency basis versus 3.9% in 2016.  A combination of strong demand for our North American and European products as well as our onboard offerings drove the impressive growth rate.

NCC excluding Fuel per APCD were up 2.0% on a Constant–Currency basis mainly driven by investments in revenue generating activities, relief efforts due to the hurricanes and payroll related incentives.

“We started the year very well positioned to achieve our Double-Doublegoals, and 2017 ended up being exceptionally good, resulting in the company exceeding these goals,” said Jason T. Liberty, executive vice president and CFO.  “Strong demand trends for cruising coupled with disciplined cost management helped deliver another record year for the company.”

FOURTH QUARTER RESULTS

US GAAP and Adjusted Net Income for the fourth quarter were $288.0 millionor $1.34 per share.  Last year, US GAAP and Adjusted Net Income were $261.1 million or $1.21 per share and $264.7 million, or $1.23 per share.

Gross Yields were up 4.1% on a Constant-Currency basis.  Net Yields were up 3.9% on a Constant-Currency basis, beating the mid-point of the guidance by 165 basis points.  Strong close-in demand for our core products combined with better than expected onboard spend drove the outperformance.

Gross Cruise Costs per APCD increased 5.6% on a Constant-Currency basis.  Net Cruise Costs (“NCC”) excluding Fuel per APCD were up 8.7% on a Constant-Currency basis.

Thank-you, Thankyou Bonus
As previously stated the company has now successfully completed the Double-Double — earnings per share have more than doubled during the Double-Double period and ROIC has risen above 10%.  This success has been possible due to the passion and commitment of our people and the company has decided to give them a surprise bonus for their Double-Double efforts.

Today, the company announced that it will give a bonus to every one of its 66,000 employees equal to 5% of their salary, excluding corporate officers. This Thank-you, Thank-you Bonus will be in the form of equity grants vesting over 3 years, thus giving every employee a stake in the company’s future success.  The Thank-you, Thank-you Bonus totals approximately $80 million.  It will also include major upgrading of crew facilities and recreation areas.

“Our people are what make our business,” said Richard D. Fain, chairman and CEO.  “We wanted to show our appreciation in a tangible way and we wanted it to reach every employee regardless of level in the organization.  It was our way of saying thanks a million; in fact, thanks 80 million.”

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