01—Abstract
Summary
Summary of the 10-K filed February 22, 2019. Cited figures are marked; the original filing is the authoritative source.
Royal Caribbean Cruises Ltd. (RCL) reported strong financial performance in its 2018 10-K filing, highlighting an 18%a increase in Adjusted EPS year-over-year, marking the fifth consecutive year of double-digit earnings growth.
The company demonstrated robust revenue growth, with Total Revenues increasing by 8.2% to $9.5 billionb, driven by both higher ticket prices and increased onboard spending per passenger. This growth was supported by a 4.0% increase in capacity, including the delivery of new, technologically advanced ships like Symphony of the Seas and Celebrity Edge. The company's strategic acquisitions, such as the 66.7% stake in Silversea Cruises, are expanding its presence in the ultra-luxury and expedition markets, positioning it for future capacity growth.
RCL also continues to focus on operational efficiencies, cost management, and shareholder returns, evidenced by its share repurchase program and an announced 17% increase in its common stock dividend. Looking ahead to 2019, RCL anticipates continued growth with an expected capacity increase of 8.6% and projected Adjusted EPS between $9.75c and $10.00, signaling confidence in its ongoing expansion and profitability.
02—Key points
Key Highlights
- Achieved 18% year-over-year growth in Adjusted EPS in 2018, continuing a five-year trend of double-digit earnings growth.
- Total Revenues grew by 8.2% to $9.5 billion in 2018, driven by a 4.0% increase in capacity and higher ticket prices and onboard spending.
- Acquisition of a 66.7% stake in Silversea Cruises in July 2018, enhancing presence in the ultra-luxury and expedition cruise segments.
- Significant fleet expansion with the addition of new ships: Symphony of the Seas, Azamara Pursuit, and Celebrity Edge in 2018, and further new builds on order.
- Announced a 17% increase in common stock dividend and has $700 million remaining under its share repurchase program, demonstrating commitment to shareholder returns.
- Projected 2019 capacity increase of 8.6% and guidance for Adjusted EPS of $9.75-$10.00, indicating positive near-term outlook.
- Launched 'Perfect Day Island Collection' initiative with Perfect Day at CocoCay set to open in Spring 2019, aimed at enhancing destination experiences.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Royal Caribbean Cruises Ltd kept $0.19.
- Revenue$9.49B100.0%
- Cost of revenue−$5.26B55.4%
- Gross profit$4.23B44.6%
- Operating costs−$2.34B24.6%
- Operating income$1.89B20.0%
- Interest, other & tax−$83.8M0.9%
- Net income$1.81B19.1%
Where FY2018 revenue went
$9.49B- Cost of revenue: $5.26B, 55% of revenue
- Net income: $1.81B, 19% of revenue
- SG&A: $1.30B, 14% of revenue
- Other operating costs: $1.03B, 11% of revenue
- Interest, other & tax: $83.8M, 0.9% of revenue
Kept 19% as net incomeInterest, other & tax $83.8M · 0.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 22, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $9.49B$8.78B | +8.2% |
| Cost of Revenue | $5.26B$4.90B | +7.5% |
| Gross Profit | $4.23B$3.88B | +9.0% |
| SG&A Expenses | $1.30B$1.19B | +9.9% |
| Operating Income | $1.89B$1.74B | +8.6% |
| Interest Expense | $333.67M$299.98M | +11.2% |
| Net Income | $1.81B$1.63B | +11.4% |
| EPS (Basic) | $8.60$7.57 | +13.6% |
| EPS (Diluted) | $8.56$7.53 | +13.7% |
| Shares Outstanding (Basic) | 210.57M214.62M | −1.9% |
| Shares Outstanding (Diluted) | 211.55M215.69M | −1.9% |
05—Questions
Frequently Asked Questions
What was Royal Caribbean's (RCL) financial performance in 2018?
In 2018, Royal Caribbean Cruises Ltd. reported strong financial results, including an 18% year-over-year increase in Adjusted EPS, its fifth consecutive year of double-digit earnings growth. Total revenues rose by 8.2% to $9.5 billion, driven by increased capacity, higher ticket prices, and enhanced onboard spending. Net income attributable to Royal Caribbean Cruises Ltd. was $1.81 billion.
What are the key strategic initiatives and growth drivers for RCL?
RCL's strategy focuses on fleet expansion and modernization, including the delivery of new ships like Symphony of the Seas and Celebrity Edge. A significant strategic move was the acquisition of a 66.7% stake in Silversea Cruises, broadening its reach into the ultra-luxury and expedition markets. The company is also investing in destination experiences with its 'Perfect Day Island Collection,' starting with Perfect Day at CocoCay. Continued focus on operational efficiencies and cost management also supports its growth.
How is RCL committed to returning value to shareholders?
RCL demonstrates its commitment to shareholder value through a consistent increase in dividends and share repurchases. In 2018, the company announced a 17% increase in its common stock dividend and had $700 million remaining under its $1.0 billion share repurchase program authorized in May 2018, indicating a balanced approach to capital allocation.
What is RCL's outlook for 2019?
For 2019, Royal Caribbean anticipates continued growth, projecting an 8.6% increase in capacity. The company provided initial guidance for Adjusted Diluted EPS in the range of $9.75 to $10.00, signaling confidence in its future performance driven by new ship deliveries and ongoing yield improvements.
06—Continue