Royal Caribbean Sets Sail for Strong 2017

Maritime Activity Reports, Inc.

January 26, 2017

Harmony of the Seas (Photo: Royal Caribbean International)

Harmony of the Seas (Photo: Royal Caribbean International)

Royal Caribbean Cruises Ltd forecast higher-than-expected adjusted earnings for 2017, helped by a strong start to bookings for Caribbean cruises, putting the No. 2 U.S. cruise operator on track to beat its own forecast of doubling profit from 2014.

The company's upbeat forecast sent its shares to more than a year high and also lifted rivals Carnival Corp and Norwegian Cruise Line Holdings Ltd.
"While trends have been strong from our key sourcing regions, we are particularly encouraged by what we are seeing in North America," Jason Liberty, Royal Caribbean's chief financial officer, said on a post-earnings call on Thursday.
Liberty added that the Caribbean, a key market for cruise operators, would account for close to 50 percent of total capacity this year.
Royal Caribbean operates ships such as Harmony of the Seas and Anthem of the Seas in the Caribbean.
The company and Carnival Corp benefited in 2016 from a return in demand for cruises to the Caribbean as consumer spending rose in the United States, allowing the operators to hike ticket prices.
Strong Forecast
Miami, Florida-based Royal Caribbean forecast a 2017 adjusted profit of $6.90-$7.10 per share, higher than analysts' average estimate of $6.80 and its own goal of $6.78.
The company's net revenue yields forecast of a 4-6 percent rise on a constant-currency basis was its highest in at least 10 years, UBS analyst Robin Farley wrote in a note.
Net revenue yield, which takes into account the spending per available berth, is a keenly watched metric in cruise operators.
Royal Caribbean also reported a higher-than-expected quarterly profit for the fourth quarter, helped by demand for its pricier Caribbean cruises and higher onboard spending.
Net revenue yields increased 5.3 percent on a constant-currency basis.
Net income rose 26 percent to $261.1 million, or $1.21 per share, in the quarter ended Dec. 31, from a year earlier.
Excluding items, Royal Caribbean earned $1.23 per share, above the average analyst estimate of $1.21, according to Thomson Reuters I/B/E/S.
Revenue rose marginally to $1.91 billion, missing Wall Street expectations of $1.97 billion.
Royal Caribbean's shares were up 7.5 percent at $94.21, while Carnival touched more than a 12-year high of $57.11. Norwegian Cruise was up 3.8 percent.

(Reporting by Aravind K and Abhijith Ganapavaram in Bengaluru; Editing by Maju Samuel)
Maritime Reporter Magazine Cover Jan 2019 - Ship Repair & Conversion: The Shipyards

Maritime Reporter and Engineering News’ first edition was published in New York City in 1883 and became our flagship publication in 1939. It is the world’s largest audited circulation magazine serving the global maritime industry, delivering more insightful editorial and news to more industry decision makers than any other source.

Maritime Reporter E-News subscription

Maritime Reporter E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

Subscribe for Maritime Reporter E-News