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Royal Caribbean Cruises Ltd. announced improved earnings for the second quarter of 2010 and provided higher guidance for the third quarter and full year 2010.
“What a difference a year makes. It is gratifying to post another solid quarter with improvement in yields and strong cost control,” said Richard D. Fain, chairman and chief executive officer. Fain continued, “Despite ongoing uncertainty with the economy, our profitability continues to improve and our booking environment continues to be remarkably stable. We remain focused on strengthening our financial position and I am encouraged about the tremendous global response to our brands.”
Second Quarter 2010 Results
Royal Caribbean Cruises Ltd. announced net income for the second quarter 2010 of $60.5 million, or $0.28 per share, compared to a net loss of $35.1 million, or ($0.16) per share, in second quarter of 2009.
Revenues improved to $1.6 billion in the second quarter of 2010 compared to $1.3 billion in the second quarter of 2009, as a result of capacity increases and yield improvements. Net Yields for the second quarter of 2010 increased 4.9% despite the impact of the stronger US Dollar.
In the second quarter of 2010, NCC decreased 2.8%, and NCC excluding fuel decreased 4.4%. Excluding currency impacts, the comparable figures would have been decreases of 2.0% and 3.4%, respectively.
Improved fuel consumption efforts resulted in significantly better fuel consumption of 318,000 metric tons during the second quarter. At-the-pump pricing (including the benefit of the company’s hedging) was virtually unchanged. Altogether, the quarter’s fuel expenditures were approximately $6 million better than previous calculations.
Forward Guidance
The company reported that with the exception of currency exchange rates, the current revenue environment has remained stable. Additionally, booked load factors and average per diems continue to run ahead of same time last year for the back half of the year. Third quarter 2010 Net Yields are expected to improve approximately 7% on a Constant Currency basis, or 4% on an as-reported basis. Full Year 2010 Net Yields are expected to improve approximately 4% – 5% on a Constant Currency basis and 3% – 4% on an as-reported basis.
NCC are forecasted to be down 1% for the third quarter and down 1% – 2% for the full year of 2010. On a Constant Currency basis, NCC are forecasted to be flat to up slightly for the third quarter and down 1% for the full year of 2010.
“Demand for our cruises remains on track with our earlier projections,” said Brian J. Rice, executive vice president and chief financial officer. Rice continued, “The strengthening of the US Dollar will clearly result in a reduction of our reported yields, but also provides a corresponding reduction in expenses. Most importantly, our continued focus on cost controls and efficiency is driving improved earnings.”
Currency Exposure
Given the recent volatility in currency exchange rates, the company is expanding its disclosures regarding currency and has defined a non-GAAP measure of “Constant Currency.”
Based on current estimates for 2010, the company anticipates that 30% of its net revenues, and 20% of its NCC excluding fuel will be denominated in currencies other than US Dollar, with the British Pound and the Euro being the most significant components.
Tatiana is the news co-ordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes to monitor the hundrends of news sources of TravelDailyNews Media Network and skim the most important according to our strategy. She holds a Bachelor degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
