Analysts had expected EPS of 75 cents, compared to 66 cents a year ago, or 62 cents per share on a GAAP basis. Revenues were $2.05bn, up from $1.98bn.
Royal Caribbean raised its EPS range for the full year to $4.65 to $4.75, up from $4.45 to $4.65, on beneficial currency and fuel rates. Q3 EPS is expected to be approximately $2.70 per share. Analysts had been projecting $2.78.
While currency and fuel were the biggest drivers of the Q2 earnings increase, net yields were up 4.2% on a constant-currency basis (down 0.2% on an as-reported basis)—modestly better than expected, mostly driven by strength in the Caribbean and China itineraries.
Net cruise costs excluding fuel were up 3.4% on a constant-currency basis (down 0.1% as-reported), better than guidance mainly due to the timing of shipboard projects.
For the full year, net yields are expected to increase in the range of 2.9% to 3.9%, versus previous guidance of 2.5% to 4%, on a constant-currency basis (down 1.1% to 0.1% as-reported). Net cruise costs excluding fuel are forecast to be better than flat in constant currency (down 2.5% as reported), including some higher marketing spending.
Royal Caribbean said the better than expected performance in the Caribbean and China in Q2 and a modest increase in costs are essentially offsetting each other and are neutral to earnings. The cost increase in the second half is for some additional marketing activities focused on 2016.
Bookings since the April earnings call have been healthy and the company continues to be booked ahead of last year in both load factor and average per diems. A solid Caribbean environment is more than offsetting softness on Latin American sailings associated with the Pullmantur brand.
'Momentum in the Caribbean continues at a solid pace, and our strong booked position in the third and fourth quarters gives us confidence as we move through the second half of 2015,' cfo Jason Liberty said. 'The trajectory of our brands is firmly on course for another record year of earnings, with healthy trends extending into the first quarter of 2016.'
So far Q1 bookings are running well ahead of last year at higher prices, with improvements in the Caribbean continuing at a robust pace.