Beats EPS guidance by 39 cents
The company beat its adjusted EPS guidance by 39 cents. This was driven by better than expected revenue from the global brands, better performance from joint ventures and lower than expected expenses, driven by timing.
The company also reaffirmed its full year EPS guidance of $8.70 to $8.90 per share. This includes a negative 35-cent impact from currency and fuel since April's guidance and 6 cents related to the purchase price for Silversea Cruises, offset by better Q2 results and an improved revenue outlook.
So, excluding the impact of currency, fuel and additional interest related to the Silversea investment, Royal Caribbean is effectively raising its guidance by 40 cents per share.
'Tickled pink'
'While we are frustrated by foreign exchange and fuel rates, we are tickled pink that our business continues to excel and overcome these headwinds,' chairman and CEO Richard Fain said. 'It is a pleasure to prove, once again, how strong our brands are and to demonstrate continued upside to our yields while maintaining strong expense control.'
Adjusted net income was $482.2m, while US GAAP net income was $466.3m, up from adjusted net income and US GAAP net income of $369.5m a year ago. Net yields rose 2.8% in constant currency and 3.8% as reported. Net cruise costs, excluding fuel, per available passenger cruise day were up 1.1% in constant currency and 1.8% as reported. That was lower than guidance, driven by the timing of hotel- and marine-related projects and marketing expenses.
Revenues rose to more than $2.3bn from just under $2.2bn.
Third quarter adjusted EPS is forecast in the range of $3.90 to $3.95. This includes the negative impact of approximately 20 cents from currency and fuel when compared to the rates included in previous guidance.
Positive trends for 2019
'2018 is shaping up to be another year of record earnings, which is being driven by a strong demand environment and effective cost and capital management,' EVP and CFO Jason Liberty said. 'While it is too early to guide on 2019, it is very encouraging to see these positive trends further supporting a strong book of business for next year.'
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