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Royal's Q3 in-line, 2015 bookings 'robust,' on par with expectations

Royal Caribbean's third quarter profit came in a penny per share higher than expected, and the company said early bookings for 2015 are 'robust' and ahead of the same time last year in volume and price, and consistent with the Wall Street consensus EPS estimate.

Q3 adjusted net income was $492.9m, or $2.20 per share, up from $377m, or $1.71 per share, a year ago. US GAAP net income was $490.2m or $2.19 per share, compared to $365.7m or $1.65 in Q3 2013. Analysts had been expecting $2.19.

Constant-currency net yields were up 4.4%. On-board and other revenue drove the slight upside, particularly in Europe and Alaska, with on-board revenue yields also increasing 4.4% during the quarter.

Early bookings for 2015 are robust, Royal Caribbean said, and the company's current earnings estimates are consistent with the Wall Street consensus of $4.55 EPS for next year.

For full-year 2014, Royal Caribbean expects adjusted EPS to be approximately $3.45, smack in the middle of earlier guidance of $3.40 to $3.50. For Q4, when TUI Cruises' additional capacity continues to be a key contributor, the EPS estimate is 35 cents to 40 cents.

'Despite the usual swings, the trajectory for 2014 continues along the path described three months ago,' cfo Jason Liberty said. 'Our satisfaction with the positive results in Europe and Asia continues unabated, as does our eagerness to lap the highly promotional Caribbean environment.'

Bookings since the July earnings release have been solid and the company continues to be booked ahead of last year in both load factor and APD. Double-digit yield improvements on Europe and China sailings continue to offset the continued highly promotional Caribbean environment.  

The US dollar's recent strengthening has had a net negative impact on earnings, as analysts forecast. At same time, the price of fuel has declined and, net of hedging, that has had a small positive impact. The net impact of these two items is a negative 10 cents per share in 2014.

'We are positioned nicely on the eve of delivery of the highly anticipated Quantum of the Seas,' Royal Caribbean chairman and ceo Richard Fain said.