01—Abstract
Summary
Summary of the 10-Q filed April 25, 2013. Cited figures are marked; the original filing is the authoritative source.
Royal Caribbean Cruises Ltd. (RCL) reported solid first-quarter 2013 results, demonstrating a 4.2% increase in total revenues to $1.9 billiona, driven by higher onboard spending, ticket prices, and a slight increase in capacity.
Net income rose significantly to $76.2 millionb, or $0.35 per diluted share, compared to $47.0 million, or $0.21 per diluted share, in the prior year quarter. This performance indicates a strong recovery and effective cost management, with Net Yields improving by 2.7%. The company also provided an optimistic outlook for the full year 2013, projecting EPS between $2.30 and $2.50 and expecting Net Yields to grow between 2% and 4%.
02—Key points
Key Highlights
- Total revenues increased by 4.2% to $1.91 billion in Q1 2013 compared to $1.83 billion in Q1 2012, driven by higher passenger ticket and onboard revenues.
- Net income saw a substantial increase of 62.3% to $76.2 million ($0.35/share diluted) from $46.9 million ($0.21/share diluted) in the prior year period.
- Net Yields improved by 2.7% to $174.04 in Q1 2013, reflecting stronger pricing power and increased passenger spending.
- Cruise operating expenses increased by 2.2% to $1.28 billion, largely due to increased capacity and higher fuel costs, but were managed effectively relative to revenue growth.
- The company advanced its newbuild program, with the conditional agreement for the third Oasis-class ship becoming effective, and provided a positive full-year earnings per share outlook of $2.30 to $2.50.
- Liquidity remains strong with $215.9 million in cash and $2.0 billion available under credit facilities as of March 31, 2013.
- A class-action lawsuit concerning alleged misstatements about the company's outlook was dismissed with prejudice by a district judge on April 18, 2013, removing a potential overhang.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2013, Royal Caribbean Cruises Ltd kept $0.04.
- Revenue$1.91B100.0%
- Cost of revenue−$1.28B67.1%
- Gross profit$629.0M32.9%
- Operating costs−$463.4M24.2%
- Operating income$165.6M8.7%
- Interest, other & tax−$89.4M4.7%
- Net income$76.2M4.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2013filed April 25, 2013Financial Statements
Q1 FY2013 against Q1 FY2012
| Line item | Q1 FY2013Q1 FY2012 | Change |
|---|---|---|
| Revenue | $1.91B$1.83B | +4.2% |
| Cost of Revenue | $1.28B$1.26B | +2.2% |
| Gross Profit | $629.03M$579.37M | +8.6% |
| SG&A Expenses | $274.03M$264.60M | +3.6% |
| Operating Income | $165.63M$135.38M | +22.4% |
| Interest Expense | $90.18M$92.67M | −2.7% |
| Net Income | $76.23M$46.96M | +62.3% |
| EPS (Basic) | $0.35$0.22 | +59.1% |
| EPS (Diluted) | $0.35$0.21 | +66.7% |
| Shares Outstanding (Basic) | 219.10M217.58M | +0.7% |
| Shares Outstanding (Diluted) | 220.48M219.23M | +0.6% |
05—Questions
Frequently Asked Questions
What was Royal Caribbean's financial performance in the first quarter of 2013?
In the first quarter of 2013, Royal Caribbean reported a 4.2% increase in total revenues to $1.91 billion and a significant rise in net income to $76.2 million, or $0.35 per diluted share, compared to $46.9 million, or $0.21 per diluted share, in the first quarter of 2012. This performance was driven by higher ticket prices, increased onboard spending, and a slight capacity increase.
How did the company manage its expenses in the quarter?
Total cruise operating expenses rose by 2.2% to $1.28 billion, primarily due to a 1.5% increase in capacity and higher fuel prices. Despite these increases, the company effectively managed its costs, leading to improved operating income and a Net Yield increase of 2.7%.
What is the company's outlook for the remainder of 2013?
Royal Caribbean provided an optimistic outlook for the full year 2013, projecting diluted earnings per share to be between $2.30 and $2.50. They also anticipate Net Yields to grow by 2% to 4% and expect Net Cruise Costs per APCD (excluding fuel) to increase by 2% to 3% on a constant currency basis.
Are there any significant legal matters impacting the company?
A class-action lawsuit alleging misstatements regarding the company's 2011 outlook was dismissed with prejudice on April 18, 2013. While plaintiffs have the right to appeal, this dismissal removes a potential concern for investors.
06—Continue