Summary
Royal Caribbean Cruises Ltd. (RCL) reported strong third-quarter 2002 earnings, exceeding prior-year results and demonstrating resilience in the travel sector. Net income increased to $193.5 million ($0.99 per share) from $159.2 million ($0.82 per share) in Q3 2001. This performance was achieved despite a $20 million charge for a potential litigation settlement and a year-over-year comparison that was negatively impacted by the 9/11 attacks in Q3 2001. Excluding these items, adjusted earnings per share rose to $1.09 from $1.01, showcasing improved operational execution. Revenues reached a record $1.0 billion, up from $940.7 million in the prior year, driven by a 15.9% increase in capacity. While net yields saw a slight decline of 1.7%, management highlighted effective cost control measures, with comparable running and SG&A expenses down 4.7% on a per available berth day basis. Looking ahead, RCL anticipates a strong fourth quarter with projected yield increases and full-year earnings between $1.55 and $1.60 per share, reflecting confidence in market recovery and strategic initiatives, including the potential combination with P&O Princess.
Key Highlights
- 1Reported Q3 2002 net income of $193.5 million ($0.99/share), a significant increase from $159.2 million ($0.82/share) in Q3 2001.
- 2Achieved record Q3 2002 revenues of $1.0 billion, up from $940.7 million in the prior year, primarily due to a 15.9% capacity increase.
- 3Included a $20 million charge ($0.10/share) in Q3 2002 for a potential litigation settlement.
- 4Q3 2001 earnings were negatively impacted by $36.7 million ($0.19/share) due to the September 11th terrorist attacks.
- 5Demonstrated effective cost control, with comparable running and SG&A expenses down 4.7% per available berth day in Q3 2002.
- 6Provided full-year 2002 earnings guidance of $1.55 to $1.60 per share.
- 7Modified delivery schedules for two new ships, impacting 2003 and 2004 capital expenditure forecasts.