What was Royal Caribbean's revenue and net income performance in the first quarter of 2003?

In the first quarter of 2003, Royal Caribbean Cruises Ltd. reported revenues of $880.2 million, a 10.0% increase compared to $800.0 million in the same period of 2002. Net income was $53.2 million, a slight increase from $52.8 million in Q1 2002. Diluted earnings per share remained steady at $0.27 for both quarters.

What factors contributed to the revenue increase, and what were the challenges?

The revenue increase was primarily driven by a 11.5% rise in capacity due to new ship additions. However, this was partially offset by a 1.3% decrease in gross revenue per available passenger cruise day. This decline was attributed to a lower percentage of guests booking air travel through RCL and reduced occupancy levels, though this was somewhat mitigated by higher cruise ticket prices and onboard revenues.

What is the company's outlook on future capital expenditures and financing?

Royal Caribbean has substantial capital expenditure plans, with approximately $1.1 billion projected for 2003, primarily for new ship constructions. To fund these and general corporate purposes, the company has secured a new $500 million revolving credit facility and recently completed a $250 million senior unsecured note offering. The company believes its liquidity and financing capabilities are sufficient to meet its obligations and growth plans.

What are the company's near-term yield expectations?

Due to the war with Iraq and economic uncertainty, RCL anticipates net yields for the second quarter of 2003 to be down by 6% to 9% compared to the same period in 2002. The company notes that it is difficult to provide precise guidance for the remainder of the year due to booking trends occurring closer to sailing dates.

RCL 8-K SEC Disclosure — May 15, 2003

Summary

Royal Caribbean Cruises Ltd. (RCL) filed its first quarter 2003 financial results on May 15, 2003. The report shows a modest increase in revenues to $880.2 million, up 10% from $800.0 million in the prior year's first quarter. This revenue growth was driven by an 11.5% increase in capacity, partially offset by a decline in revenue per available passenger cruise day due to lower occupancy and reduced air passage bookings through the company. Net income remained largely flat at $53.2 million compared to $52.8 million in Q1 2002, resulting in diluted earnings per share of $0.27 for both periods. The company highlighted significant capital expenditures planned for new ship constructions, totaling approximately $1.1 billion for 2003. RCL also completed a new $500 million revolving credit facility in March 2003 and issued $250 million in senior unsecured notes in May 2003 to fund general corporate purposes and capital expenditures. Despite a slight decrease in operating cash flow, the company expressed confidence in its liquidity position and ability to fund operations and future growth.

Key Highlights

1Q1 2003 revenues increased by 10.0% year-over-year to $880.2 million, primarily due to an 11.5% increase in capacity.
2Net income was largely flat at $53.2 million for Q1 2003, with diluted EPS remaining at $0.27.
3Occupancy decreased to 101.7% in Q1 2003 from 103.9% in Q1 2002.
4Gross revenue per available passenger cruise day declined by 1.3% due to lower air passage bookings and occupancy, partially offset by increased ticket prices and shipboard revenues.
5The company has significant capital expenditure plans, with approximately $1.1 billion anticipated for 2003 for new ship construction.
6RCL replaced its credit facility in March 2003 with a $500 million unsecured revolving credit facility due in March 2008.
7Subsequent to the quarter end, in May 2003, the company completed a $250 million public offering of senior unsecured notes.

ROYAL CARIBBEAN CRUISES LTD 8-K Report (May 15, 2003)

Summary

Key Highlights

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