The full-year adjusted EPS forecast goes to a range of $9.55 to $9.65, versus the latest midpoint guidance of $9.45 per share, including the impact of the Cuba travel restrictions. This is an improvement of approximately 15 cents per share.
Second quarter adjusted EPS $2.54
Adjusted Q2 net income was $532.7m, or $2.54 per share, above Wall Street's $2.45 expectation and the company's guidance as well as last year's $482.2m, or $2.27 per share.
US GAAP net income was $472.8m, or $2.25 per share, up from $466.3m, or $2.19 per share.
Revenues went to $2.8bn, from just under $2.4bn a year ago.
Net yields were up 9.5% in constant currency and 8.1% as reported. This includes a 30 basis point negative impact related to the discontinuation of high-yielding Cuba sailings. Net cruise costs excluding fuel per available passenger cruise day were up 8.9% in constant currency and 8.2% as reported.
The Cuba impact was neutral to net cruise costs excluding fuel.
Additionally, lower interest expense contributed to the quarter's positive performance.
Full-year color
2019 net yields are expected to increase 7.75% to 8.25% in constant currency and 6.5% to 7% as reported. This range includes approximately 70 basis points related to the discontinued Cuba sailings.
Without the Cuba impact, the midpoint of the net yield guidance has improved by approximately 40 basis points, driven by better demand for core products in the second half.
Net cruise costs per available passenger cruise day excluding fuel are forecast to rise 10% to 10.5% in constant currency and 9.5% to 10% as reported.
The EPS outlook goes to $9.55 to $9.65, compared to the Wall Street consensus of $9.65.
Robust Caribbean demand
'We are elated to see our brands executing so effectively, keeping our business in an exceptionally strong position,' Chairman and CEO Richard Fain said. 'Our strategic focus on destinations, technology and people is clearly paying off. And, our core products are doing exceptionally well, driven by a gratifyingly robust demand for the Caribbean.'
2020 'off to a very strong start'
'The company's booked position for the remainder of 2019 continues to set new records with all core products in line or ahead of the company's previous expectations,' CFO/EVP Jason Liberty added. 'While it is too early to provide detailed color on 2020, we are delighted that bookings are already off to a very strong start.'
Third quarter
Third quarter net yields are expected to increase approximately 6.5% in constant currency and 5.5% to 6% as reported. Included are approximately 340 basis points from Silversea, the company's owned and operated Cruise Terminal A at PortMiami and the Perfect Day development. These net yields were negatively impacted by approximately 110 basis points from the discontinuation of Cuba sailings.
Net cruise costs per available passenger cruise day excluding fuel are expected to go up approximately 11% in constant currency and 10.5% as reported. Included are about 850 basis points from Silversea, the new cruise terminal and the Perfect Day development.
Royal Caribbean now expects Q3 adjusted EPS of approximately $4.35, spot on Wall Street's forecast.
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