Despite all the negative press swirling around the cruise ship industry, Royal Caribbean Cruises Ltd. (RCL) reported better-than-expected profits in the first quarter as booking volumes increased, costs were contained and passengers spent more money on their ships.
Royal Caribbean operates its namesake brand cruise liners, Celebrity Cruises, Pullmantur, Azamara Club Cruises and CDF Croisieres de France, as well as TUI Cruises through a 50 percent joint venture. The company’s fleet consists of 41 ships.
The Miami, Florida-based cruise ship operator reported first-quarter revenue improved to $1.91 billion, compared to $1.83 million in Q1 2012. Net income for the quarter totaled $76.23 million, or 35 cents per share, up 62 percent from $46.96 million, or 21 cents per share, in the year prior quarter. The figures were well above the company’s top-end guidance from February when it expected 10 cents to 20 cents per share in profits.
Wall Street was expecting earnings of 19 cents per share on sales of $1.9 billion.
Ticket sales increased 3 percent to $1.4 billion. On-board revenue, which includes things like alcoholic drinks, gambling and spa revenue, rose to $517.4 million, up 7 percent from last year’s quarter.
Total cruise ship operating expenses increased modestly, from $1.26 billion last year to $1.28 billion in the latest quarter.
"It was a gratifying first quarter," said Richard D. Fain, chairman and chief executive officer of Royal Carribean. "Ticket revenues were better than expected, costs were well controlled and it was encouraging to see record guest satisfaction and noticeable improvements in onboard spending as a result of our revitalization efforts.”
"Our brands have continued to generate solid demand despite a soft economy in Europe and recent adverse industry media coverage," commented Brian J. Rice, vice chairman and chief financial officer.
Bookings so far in 2013 are up 5 percent from the same period last year in the time that the industry refers to as “wave season,” a time when consumers plan and book cruise vacations. There was certainly concern among analysts about bookings given the recent cruise debacles of rival Carnival Corp. (CCL).
The solid quarter didn’t inspire Royal Caribbean to increase its guidance for the year, but it did affirm its prior outlook of second-quarter earnings in the range of 10 cents and 15 cents and full-year profits of $2.44 per share. Analysts were expecting second-quarter EPS of 17 cents per share.
Through Wednesday’s close, shares of RCL were up by about 30 percent in the past 52 weeks. Today’s news has shares surging, up more than 8 percent at 37.18 in morning trading. The stock price has a 52-week high of $38.56.
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