Summary
Royal Caribbean Cruises Ltd. (RCL) reported strong financial performance for the third quarter and the first nine months of 2010, demonstrating a significant recovery from the previous year. Total revenues saw a substantial increase, driven by a rise in capacity and improved Net Yields, reflecting higher ticket prices and occupancy rates. This positive trend was supported by the successful integration of new vessels and a rebound in market conditions, partially mitigating the adverse impact of currency fluctuations. The company also reported a significant improvement in profitability, with Net Income and Diluted Earnings Per Share showing substantial year-over-year growth. This enhanced profitability was bolstered by the one-time gain from the Rolls Royce settlement. Despite increased operating expenses due to higher capacity, cost containment measures and favorable currency movements helped manage these costs. RCL's financial position remains solid, with a decrease in Net Debt-to-Capital, indicating a strengthening balance sheet. The company is well-positioned with a robust outlook for the remainder of 2010 and into 2011, with planned capacity increases and continued focus on yield management and cost control.
Financial Highlights
45 data points| Revenue | $2.06B |
| Cost of Revenue | $1.24B |
| Gross Profit | $821.03M |
| SG&A Expenses | $213.30M |
| Operating Income | $445.50M |
| Interest Expense | $89.08M |
| Net Income | $350.18M |
| EPS (Basic) | $1.63 |
| EPS (Diluted) | $1.61 |
| Shares Outstanding (Basic) | 215.15M |
| Shares Outstanding (Diluted) | 217.51M |
Key Highlights
- 1Total revenues increased by 16.8% for the third quarter of 2010 and 16.0% for the first nine months, driven by higher capacity and improved Net Yields.
- 2Net Income more than doubled year-over-year for the third quarter, reaching $356.8 million ($1.64 per diluted share), and nearly tripled for the nine-month period, reaching $504.8 million ($2.32 per diluted share).
- 3Occupancy rates improved to 107.3% for the third quarter and 104.7% for the nine-month period, up from 105.4% and 103.0% respectively in the prior year.
- 4Net Cruise Costs per APCD decreased by 2.3% for the third quarter, indicating effective cost management despite capacity increases.
- 5Net Debt-to-Capital ratio improved to 49.3% as of September 30, 2010, down from 52.0% at the end of 2009, reflecting a stronger balance sheet.
- 6The company secured $1.1 billion in financing for the upcoming delivery of the 'Allure of the Seas', scheduled for October 28, 2010.
- 7RCL provided a positive outlook for the fourth quarter and full year 2010, expecting continued Net Yield growth and managed Net Cruise Costs.