Royal Caribbean Cruises Ltd. (NYSE: RCL) today reported US GAAP and adjusted earnings for 2016 of $5.93 and $6.08 per share, respectively, resulting in more than a 25% increase in both US GAAP and adjusted earnings over 2015.
As the company enters its DOUBLE-DOUBLE year, forward bookings are at record levels and earnings are expected to be in the range of $6.90 – $7.10 per share.
KEY HIGHLIGHTS
Full Year 2016:
- Net Yields were up 3.9% on a Constant-Currency basis (1.6% As-Reported).
- Net Cruise Costs (“NCC”) excluding fuel were up 0.9% on a Constant-Currency basis (up 0.3% As-Reported).
- US GAAP Net Income was $1.28 billion or $5.93 per share, versus $665.8 million or $3.02 per share in 2015. Last year’s figure includes an impairment charge related to Pullmantur.
- Adjusted Net Income was $1.31 billion, or $6.08 per share, versus Adjusted Net Income of $1.07 billion, or $4.83 per share, in 2015. This exceeds the midpoint of both the company’s original guidance for the year and the most recent update.
Full Year 2017 Outlook:
- Net Yields are expected to increase 4.0% to 6.0% on a Constant-Currency basis (3.3% to 5.3% As-Reported).
- NCC excluding fuel are expected to be flat on a Constant-Currency basis (flat to (1.0%) As-Reported).
- Adjusted EPS for 2017 is expected to be in the range of $6.90 – $7.10 per share.
- Foreign exchange and fuel prices are creating headwinds. The above guidance is based on current rates which will cost the company $0.18 per share versus last year’s figures. Since the last update, the impact has worsened by $0.10 per share.
“As we enter our DOUBLE-DOUBLE year, we have never been so well positioned,” said Richard D. Fain, chairman and chief executive officer. “This program has done what it set out to do – bookings are at record levels, the preference our brands enjoy has never been stronger, we are on the cusp of investment grade ratings, our dividends are at an all-time high, costs have been well managed, and our guests’ satisfaction has never been better. The DOUBLE-DOUBLE program helped reinforce the mindset and discipline across our organization which has gotten us here. For that I thank every one of the men and women whose passion and efforts are driving this performance. While currency and fuel are both significant negatives at the moment, our business continues to thrive.”
FOURTH QUARTER RESULTS
US GAAP and Adjusted Net Income for the fourth quarter of 2016 were $261.1 million, or $1.21 per share and $264.7 million, or $1.23 per share, respectively, compared to US GAAP and Adjusted Net Income of $206.8 million, or $0.94 per share, for the same period last year. Constant-Currency NCC excluding fuel were down 1.9%, better than guidance, driven by operational efficiencies. Net Yields on a Constant-Currency basis increased 5.3%, below guidance due mainly to lower close-in pricing.
FULL YEAR 2016 RESULTS
US GAAP Net Income for the full year 2016 was $1.28 billion or $5.93 per share, compared to $665.8 million, or $3.02 per share in 2015. The 2015 figure includes a non-cash impairment charge related to the Pullmantur brand. Adjusted Net Income for the full year 2016 was $1.31 billion, or $6.08 per share, compared to Adjusted Net Income of $1.07 billion, or $4.83 per share, for the full year 2015. This represents more than a 25% year-over-year increase in earnings per share.
Net Yields for the full year 2016 increased 3.9% on a Constant-Currency basis versus 3.5% in 2015 marking another year of consistent yield improvement.
NCC excluding fuel were up 0.9% on a Constant-Currency basis. The average bunker price net of hedging for full year 2016 was $522 per metric ton and consumption was 1,367,000 metric tons.
During 2016, both the US dollar and the price of fuel in world markets rose. There has historically been an inverse relationship between the foreign exchange impact on our currency exposures and fuel prices, but recently global trends have caused both factors to work against the business. For 2016, the net impact of currency and fuel was a negative $0.08 per share relative to January guidance.