8-K

ROYAL CARIBBEAN CRUISES LTD 8-K Report (Apr 21, 2004)

Filed April 21, 2004For Securities:RCL

Summary

Royal Caribbean Cruises Ltd. (RCL) reported a significant increase in its first quarter 2004 financial results, with net income rising to $95.8 million, or $0.47 per share, compared to $53.2 million, or $0.27 per share, in the same period of 2003. Total revenues surged by 20.6% to $1.1 billion, driven by a 13.4% increase in capacity and higher cruise ticket prices, which led to a 5.3% increase in Net Yields. The company expressed optimism for the remainder of 2004, anticipating Net Yields to increase by 9% to 11% in the second quarter and an overall full-year increase of 5% to 7%. Management reiterated its full-year 2004 earnings per share forecast of $2.10 to $2.30. The report also highlighted the addition of the "Jewel of the Seas" to its fleet and a new partnership with Cirque du Soleil for its Celebrity Cruises brand, signaling strategic growth initiatives.

Key Highlights

  • 1Net income for Q1 2004 was $95.8 million ($0.47/share), a substantial increase from $53.2 million ($0.27/share) in Q1 2003.
  • 2Total revenues grew 20.6% to $1.1 billion in Q1 2004, driven by increased capacity and higher ticket prices.
  • 3Net Yields increased by 5.3% in Q1 2004, indicating strong revenue performance despite capacity expansion.
  • 4The company forecasts full-year 2004 Net Yields to increase by 5% to 7%, with Q2 2004 Net Yields projected to rise 9% to 11%.
  • 5Full-year 2004 diluted EPS is projected to be between $2.10 and $2.30.
  • 6The new ship "Jewel of the Seas" was added to the fleet in April 2004.
  • 7Celebrity Cruises announced an exclusive partnership with Cirque du Soleil.

Frequently Asked Questions

The revenue increase was primarily driven by a 13.4% rise in capacity and an increase in cruise ticket prices. This combination led to a 5.3% increase in Net Yields, a key metric for measuring pricing performance.

Royal Caribbean Cruises Ltd. is optimistic, forecasting Net Yields to increase between 9% to 11% in the second quarter of 2004 and between 5% to 7% for the full year. The company maintains its full-year earnings per share projection of $2.10 to $2.30, assuming current booking trends continue and no major external disruptions occur.

Yes, the company is adding the "Jewel of the Seas" to its fleet in April 2004. Additionally, Celebrity Cruises has entered into an exclusive six-year agreement with Cirque du Soleil, which includes cross-marketing opportunities and unique onboard entertainment concepts.

While Gross Cruise Costs per Available Passenger Cruise Day increased by 4.9% and Net Cruise Costs by 2.6% in Q1 2004 compared to Q1 2003, the company's forecast for the full year Net Cruise Costs remains unchanged at a 1% to 2% increase. However, the increase is not evenly spread, with higher marketing and fuel expenses expected in Q2, and costs expected to be roughly flat for the second half of the year.