The company trimmed its full-year EPS guidance by 20 cents at the midpoint, based on a negative impact of about 27 cents related to currency and fuel, partly offset by the stronger than expected Q2.
Q2 net income was $229.9m, up from $185m, on revenues of $2.1bn, up from $2bn. Net yields were up 1.1% and net cruise costs excluding fuel were up 1.9%, both in constant currency, in line with guidance.
'While there are always puts and takes in our key markets, our portfolio is performing as expected, our booked position remains strong, and our newbuilds are entering their markets to great fanfare,' cfo Jason Liberty said. 'These factors are driving another year of record earnings.'
Yields and costs for the year are generally as expected.
The sale of 51% of the Pullmantur Group announced in May was completed at the end of July, and Pullmantur results will no longer be consolidated in the company's accounts. Since Pullmantur's yields and costs are lower than the fleet average, this change increases yields and cost metrics this year.
2016 adjusted earnings are now expected to be up 25%, in the range of $6 to $6.10, compared to guidance of $6.15 to $6.35 earlier.
This 20-cent decrease at the midpoint is due to 27 cents of negative impact from currency and fuel rates. Of that, approximately 14 cents is related to weakness in the British pound following the Brexit vote. The pound represents about 30% of RCL's currency exposure. Lower than expected fuel expense in Q2 partially offset the full year impact of weaker foreign currencies and rising fuel prices.
Adjusted Q3 EPS is now expected to be approximately $3.10, below the $3.42 consensus expectation, and compared to $2.84 a year ago. Net yields for the quarter are forecast to be up approximately 2% in constant currency, driven mainly by the deconsolidation of the Pullmantur Group.
The company's booked position for the remainder of 2016 remains strong, similar to last year's record levels. At this point Royal Caribbean is more than 93% booked for the year, Liberty said.
Looking further ahead, the company's booked position for the next 12 months is also strong, up in both rate and volume, versus the same time last year. Net yields on a constant currency basis are forecast to rise in the range of 4% to 4.5%, driven primarily by the deconsolidation of the Pullmantur Group.
Continued strength for North American products is helping offset weakness in the Eastern Mediterranean and in Shanghai.
So far, Royal Caribbean hasn't seen UK demand softening since the Brexit vote. In fact, according to Liberty, the UK is one of the company's strongest markets this summer.
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