8-K

ROYAL CARIBBEAN CRUISES LTD 8-K Report (May 7, 2002)

Filed May 7, 2002For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) filed this Form 6-K on May 7, 2002, reporting its unaudited first quarter financial results for the period ended March 31, 2002. The company reported a slight increase in net income to $52.8 million, or $0.27 per diluted share, compared to $52.5 million, or $0.27 per diluted share, in the prior year's first quarter. Revenues saw a significant increase of 10.1% to $800.0 million, driven by a 23.3% increase in capacity, although this was partially offset by a 10.7% decline in gross revenue per available passenger cruise day. Despite the revenue growth, net revenue per available passenger cruise day decreased by 6.9%, influenced by pricing actions taken after September 11, 2001, increased fleet capacity, and softness in the U.S. economy. The company also announced upcoming capital expenditures and significant commitments for new vessel deliveries, including the acceleration of the delivery of the 'Navigator of the Seas' to December 2002. Investors should note the ongoing commitment to fleet expansion and the potential impacts of industry conditions.

Key Highlights

  • 1Revenue increased by 10.1% to $800.0 million in Q1 2002, driven by a 23.3% increase in capacity.
  • 2Net income remained relatively flat at $52.8 million ($0.27/share diluted) for Q1 2002, compared to $52.5 million ($0.27/share diluted) in Q1 2001.
  • 3Net revenue per available passenger cruise day decreased by 6.9% in Q1 2002, attributed to post-9/11 pricing adjustments and increased capacity.
  • 4Operating expenses increased by 10.1% in Q1 2002, largely due to increased capacity.
  • 5Marketing, selling, and administrative expenses decreased by 9.5% in Q1 2002, reflecting timing of activities and cost reduction initiatives.
  • 6The company has six ships on order with an aggregate contract price of approximately $2.6 billion.
  • 7The delivery of 'Navigator of the Seas' has been moved to December 2002, impacting projected capital expenditures for 2002 and 2003.

Frequently Asked Questions

The primary driver for the 10.1% revenue increase to $800.0 million was a significant 23.3% increase in company capacity, primarily from new ship deliveries in 2001. However, this was partially offset by a decline in revenue per available passenger cruise day.

The report indicates that pricing actions were taken in the months following September 11, 2001, which contributed to a 10.7% decline in gross revenue per available passenger cruise day and a 6.9% decline in net revenue per available passenger cruise day in Q1 2002. This suggests a challenging consumer demand environment impacted by the event.

As of March 31, 2002, Royal Caribbean had six new ships on order with an aggregate contract price of approximately $2.6 billion. The company also anticipates overall capital expenditures of around $1.1 billion for 2002, with revised projections after the delivery date change for 'Navigator of the Seas'.

The company announced on April 24, 2002, that net revenues per available passenger cruise day are expected to be down 5-7% in the second and third quarters of 2002 compared to 2001, based on current pricing trends and booking levels.