Summary
Royal Caribbean Cruises Ltd. (RCL) reported a significant increase in total revenues for the second quarter and the first six months of 2011 compared to the prior year, driven by a rise in capacity and improved Net Yields, partly due to favorable foreign currency exchange rates. Despite geopolitical challenges that necessitated deployment adjustments and pricing reductions in certain regions, the company managed to grow its top line. However, operating expenses also increased, primarily due to higher capacity and fuel costs, along with increased marketing, selling, and administrative expenses associated with international expansion. The company's net income saw a substantial improvement in the second quarter, reaching $93.5 million ($0.43 per diluted share) from $53.7 million ($0.25 per diluted share) in the prior year. For the six-month period, net income increased to $171.9 million ($0.78 per diluted share) from $133.6 million ($0.61 per diluted share). This improved profitability was partly aided by a non-recurring gain on fuel options in the first half of 2011, which offset a one-time litigation settlement gain in the prior year. The company also successfully managed its debt, with Net Debt-to-Capital decreasing to 49.1% as of June 30, 2011.
Financial Highlights
46 data points| Revenue | $1.77B |
| Cost of Revenue | $1.19B |
| Gross Profit | $582.50M |
| SG&A Expenses | $242.26M |
| Operating Income | $168.19M |
| Interest Expense | $92.97M |
| Net Income | $93.49M |
| EPS (Basic) | $0.43 |
| EPS (Diluted) | $0.43 |
| Shares Outstanding (Basic) | 217.03M |
| Shares Outstanding (Diluted) | 219.37M |
Key Highlights
- 1Total revenues increased by 10.4% to $1.8 billion in Q2 2011 and 11.4% to $3.4 billion in the first six months of 2011 compared to the same periods in 2010.
- 2Net income rose to $93.5 million ($0.43/share diluted) in Q2 2011 and $171.9 million ($0.78/share diluted) in the first six months of 2011, showing significant year-over-year growth.
- 3Net Yields increased by 3.8% for both the quarter and the six-month period, driven by favorable foreign currency exchange rates and increased ticket prices.
- 4Capacity, measured by Available Passenger Cruise Days (APCD), increased by 6.6% in Q2 and 8.3% in the first six months of 2011.
- 5Net Debt-to-Capital improved to 49.1% as of June 30, 2011, down from 52.5% as of December 31, 2010, indicating a strengthening balance sheet.
- 6The company reinstated its quarterly dividend in Q3 2011, declaring a $0.10 per share dividend, signaling confidence in future financial performance.
- 7Significant capital expenditures are planned for new ship construction, with aggregate costs of approximately $2.7 billion for ships on order as of June 30, 2011.