Cruise line reports 4Q income boost
Stronger demand in the Caribbean and new cruises in China for the winter helped to drive better fourth-quarter results for Royal Caribbean Cruises Ltd.
The world’s second-largest cruise operator posted net income in the period of $206.8 million or 94 cents a share. That compared with $109.7 million, or 49 cents, the year before, the company announced Tuesday.
Revenue in the quarter rose 4.6 percent to $1.9 billion from a year ago.
Still, though Royal Caribbean’s earnings per share beat analysts’ estimates of 92 cents, it missed the revenue forecast of $1.95 billion, according to Zacks Equity Research.
The revenue misswas attributed to the effects of a strongU.S. dollar.
For all of 2015, the Miamicruise company generated a smaller profit of $665.8 million, or $3.02 a share. In 2014, it had profit of $764.1 million, or $3.43 a share.
Revenue in 2015 climbed to $8.3 billion from $8 billion in 2014.
Full-year results included non-cash impairment charges of $399.3 million relating to its Pullmantur brand. Adjusted profit, excluding the impairment charges, was $755.7 million, or $3.39 a share, Royal Caribbean said in an earnings release.
Royal Caribbean’s shares fell 15 percent to $71.70 in tradingTuesdayontheNew York Stock Exchange.
Beside Pullmantur, The Miami-based cruise company’s brands include Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises, CDF Croisières de France and TUI Cruises through a 50 percent joint venture.
“Our core brands are firing on all cylinders, ournew ships are performing excep-
tionally well and our costs are well controlled. This is driving 40 percent-plus earnings growth in two consecutive years,” Richard D. Fain, chairman and CEO, said in a statement.
Turning to 2016, Royal Caribbean said its booked load factors, or the percentage of cabins booked on a cruise, is equal to last year but at higher prices.
The strong position was driven by stronger demand by North American consumers for cruises in the Caribbean, Alaska and Bermuda, which represents more than 50 percent of Royal’s annual capacity.
The cruise company also reports seeing strong demand for its Northern Europe and Asia sailings, which are expected to offset current pricing challenges in markets like the Mediterranean, Australia and Brazil.
“Despite some challenges in select destinations, our strong brands, innovative hardware and deployment optimization are continuing to deliver strong yield growth in 2016,” said Jason T. Liberty, chief financial officer.
The company is forecasting adjusted earnings per share for the first quarter of 30 cents and expects fullyear 2016 to be in the range of $5.90 to $6.10.
During the second quarter, Royal Caribbean International will take delivery of two new ships: Ovation of the Seas, the third Quantum class vessel, and Harmony of the Seas, its third Oasis class ship.
Harmony will sail into Port Everglades in November to begin cruises to the Caribbean.
Splendour of the Seas will leave the Royal Caribbean fleet in April. And this summer, TUI Cruises, the company’s German joint venture, will take delivery of its third new build, Mein Schiff 5.