01—Abstract
Summary
Summary of the 10-Q filed October 30, 2019. Cited figures are marked; the original filing is the authoritative source.
Royal Caribbean Cruises Ltd. (RCL) reported strong financial results for the third quarter and first nine months of 2019, showcasing significant growth in both revenue and net income compared to the prior year.
Total revenues increased by 14.0% for the quarter and 17.8% for the nine months, driven by higher passenger ticket revenues and onboard spending. This top-line growth, coupled with effective cost management, resulted in a substantial increase in profitability, with diluted earnings per share rising to $4.20a for the quarter and $7.65 for the nine months. The company's capacity also grew, supported by fleet expansion, including the integration of Silversea Cruises and new ship deliveries, contributing to increased passenger volumes and enhanced yields.
02—Key points
Key Highlights
- Total revenues increased by 14.0% in Q3 2019 to $3.2 billion and by 17.8% for the nine months ended September 30, 2019, to $8.4 billion, year-over-year.
- Net income attributable to Royal Caribbean Cruises Ltd. increased to $883.2 million ($4.20 per diluted share) in Q3 2019, up from $810.4 million ($3.86 per diluted share) in Q3 2018.
- Gross Yields and Net Yields saw significant increases, with Gross Yields up 5.4% and Net Yields up 5.2% for the quarter, reflecting improved pricing and onboard spending.
- The company continues to invest in fleet expansion, with 15 ships on order as of September 30, 2019, representing significant future capital commitments.
- Adjusted Diluted Earnings Per Share for the full year 2019 is projected to be between $9.50 and $9.55, indicating strong expected profitability.
- The company maintained a strong liquidity position with $2.2 billion in cash and available credit facilities as of September 30, 2019.
- While facing some headwinds such as hurricane disruptions and regulatory changes impacting Cuba sailings, the company demonstrated resilience and delivered robust financial performance.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2019, Royal Caribbean Cruises Ltd kept $0.28.
- Revenue$3.19B100.0%
- Cost of revenue−$1.62B50.9%
- Gross profit$1.56B49.1%
- Operating costs−$673.0M21.1%
- Operating income$890.8M28.0%
- Interest, other & tax−$7.6M0.2%
- Net income$883.2M27.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2019filed October 30, 2019Financial Statements
Q3 FY2019 against Q3 FY2018
| Line item | Q3 FY2019Q3 FY2018 | Change |
|---|---|---|
| Revenue | $3.19B$2.80B | +14.0% |
| Cost of Revenue | $1.62B$1.41B | +15.0% |
| Gross Profit | $1.56B$1.38B | +12.9% |
| SG&A Expenses | $352.73M$325.17M | +8.5% |
| Operating Income | $890.79M$799.73M | +11.4% |
| Interest Expense | $102.04M$86.51M | +17.9% |
| Net Income | $883.24M$810.39M | +9.0% |
| EPS (Basic) | $4.21$3.88 | +8.5% |
| EPS (Diluted) | $4.20$3.86 | +8.8% |
| Shares Outstanding (Basic) | 209.57M209.05M | +0.2% |
| Shares Outstanding (Diluted) | 210.12M209.93M | +0.1% |
05—Questions
Frequently Asked Questions
How did Royal Caribbean's revenue perform in the third quarter of 2019 compared to the previous year?
In the third quarter of 2019, Royal Caribbean Cruises Ltd. reported total revenues of $3.2 billion, an increase of 14.0% compared to $2.8 billion in the third quarter of 2018. This growth was primarily driven by a 14.8% increase in passenger ticket revenues and an 11.8% increase in onboard and other revenues.
What was the company's profitability for the first nine months of 2019?
For the nine months ended September 30, 2019, net income attributable to Royal Caribbean Cruises Ltd. was $1.6 billion, or $7.65 per diluted share, compared to $1.5 billion, or $7.05 per diluted share, for the same period in 2018. Adjusted diluted earnings per share for the nine months was $8.12.
What are the key factors contributing to the company's increased yields?
The increase in yields for the third quarter of 2019 is attributed to a combination of factors including an 8.2% increase in capacity, higher ticket prices driven by the inclusion of Silversea Cruises and new ship additions, and increased onboard spending per passenger due to revenue-enhancing initiatives.
What is the outlook for Royal Caribbean's full-year 2019 performance?
The company projected a full-year 2019 Adjusted Earnings Per Share (diluted) to be between $9.50 and $9.55. This guidance reflects continued strong performance expected from Net Yields increasing approximately 8.0% on a constant currency basis.
06—Continue