Royal Caribbean Cruises Ltd. today reported record first quarter results and updated its full year Adjusted EPS guidance to a range of $9.65 to $9.85 per share. 

This range includes negative impacts of $0.25 related to the incident in the Grand Bahama Shipyard and approximately $0.25 as a result of a stronger dollar and higher fuel prices versus the January guidance.  The vast majority of these impacts are being offset by better first quarter results and an improved revenue outlook.

For the first quarter, the company reported US GAAP earnings of $1.19 per share and adjusted earnings of $1.31 per share, beating the previous guidance mainly due to better revenue.

Royal Caribbean’s Symphony of the Seas right after departing STX France shipyard


First Quarter 2019 results:

  • US GAAP Net Income was $249.7 million or $1.19 per share and Adjusted Net Income was $275.8 million or $1.31 per share. Last year, US GAAP Net Income was $218.7 million or $1.02 per share, and Adjusted Net Income was $232.8 million or $1.09 per share.
  • Gross Yields were up 10.8% in Constant-Currency (up 8.8% As-Reported). Net Yields were up 9.3% in Constant-Currency (up 7.2% As-Reported).
  • Gross Cruise Costs per Available Passenger Cruise Days (“APCD”) increased 9.5% in Constant-Currency (up 8.5% As-Reported). Net Cruise Costs (“NCC”) excluding Fuel per APCD were up 9.6% in Constant-Currency (up 8.7% As-Reported).

Full Year 2019 Outlook:

  • Net revenue yields in the first quarter beat our previous guidance and are expected to do so for the rest of the year as well. Overall, the company’s booked position remains at a record level in both rate and volume.
  • Adjusted earnings for the full year are expected to be in the range of $9.65 to $9.85 per share. This range includes the negative impacts of $0.25per share from the incident in the Grand Bahama Shipyard and approximately $0.25 per share from currency and fuel since the January guidance.
  • Net Yields are expected to increase 7.5% to 9.0% in Constant-Currency (up 6.5% to 8.0% As-Reported). These metrics include approximately 350 basis points from the operation of Silversea, the new cruise terminal and the Perfect Day development.
  • NCC excluding Fuel per APCD are expected to be up approximately 10.0% in Constant-Currency (up approximately 9.5% As-Reported). The main driver of the increase versus the January guidance is the loss of cruise days as a result of canceled sailings. These metrics include approximately 700 basis points from the operation of Silversea, the new cruise terminal and the Perfect Day development.

Grand Bahama Shipyard Incident:

On April 1, 2019, Royal Caribbean’s Oasis of the Seas was undergoing maintenance at the Grand Bahama Shipyard when an accident involving the drydock caused two construction cranes to collapse on the stern of the ship.  The damage to the ship was extensive and the ship had to go to a dock in Europe for repairs.  As a result, the ship was taken out of service for almost a month and is expected to return back to service for its normally scheduled May 5, 2019 sailing.  The company estimates the direct financial impact of this unusual event, net of insurance, will be a reduction of approximately $0.25 per share to the company’s full year Adjusted EPS, mostly driven by lost revenue.