Summary
Royal Caribbean Cruises Ltd. (RCL) reported its second quarter 2003 results, with net income of $55.7 million, or $0.28 per diluted share, a decrease from $66.7 million, or $0.34 per diluted share, in the prior year's second quarter. Despite the dip in net income, revenues saw a notable increase of 10.2% to $905.8 million, driven primarily by a 15.5% expansion in capacity. However, this growth was tempered by a 4.6% decline in gross yields, attributed to lower ticket prices and occupancy, though offset by stronger onboard revenues. The company noted a positive trend with strengthening bookings and pricing levels post-war, exceeding their earlier expectations. While visibility remains limited for forecasting, RCL anticipates full-year net yields to be down approximately 1% to 2% year-over-year, with the third quarter projected for a 2% to 4% decline and the fourth quarter expected to be flat to slightly down. The addition of the new ship, 'Serenade of the Seas,' to its fleet is expected to contribute to future growth.
Key Highlights
- 1Second quarter 2003 net income was $55.7 million ($0.28 per diluted share), down from $66.7 million ($0.34 per diluted share) in Q2 2002.
- 2Second quarter 2003 revenues increased 10.2% to $905.8 million, driven by a 15.5% increase in capacity.
- 3Gross yields declined 4.6% in Q2 2003 due to lower ticket prices and occupancy, partially offset by higher onboard revenues.
- 4Net yields, however, were better than guided, decreasing 4.8% compared to the company's forecast of a 6%-9% decline.
- 5Bookings and pricing levels have strengthened since the last update, indicating a positive post-war recovery trend.
- 6RCL is adding the new 'Serenade of the Seas' to its fleet, the third Radiance-class ship.
- 7The company secured an additional $50 million in commitments under its unsecured revolving credit facility, increasing availability to $550 million.