Hurricanes cost Royal Caribbean $55M, but Q3 profit still rises

Royal Caribbean's three Oasis-class ships.

Royal Caribbean Cruises Ltd. reported an 8.6% increase in third-quarter net profit despite costs from the most destructive hurricane season in its history.

Net income rose to $752.8 million from $693.3 million. If not for five hurricanes in September, including two in the Pacific, Royal Caribbean said that net profit would have been $55 million more.

"That made it by far the most expensive hurricane season in our 45-year history," chairman Richard Fain said in a conference call with analysts.

Royal Caribbean said strong close-in demand for cruises in July and August and higher onboard spending helped it offset hurricane-related costs and lost revenue from cancelled cruises and a decrease in bookings.

Fain said demand fell "precipitously" during September, both for cruises that month and for future bookings. The softness lasted about six weeks but bookings for virtually all itineraries are back to normal now, Fain said.

Fain said he thinks that travellers have become "inured" to disruptions such as hurricanes or terror attacks so that they are affecting booking patterns for shorter time periods than in the past.

Royal Caribbean said its forecast of adjusted full-year earnings of up to $1.59 billion still holds.

In the third quarter, revenue advanced slightly to $2.57 billion from $2.56 billion a year earlier.  Onboard revenue was up 5%, led by increases in internet usage and shore excursions.

Carnival Corporation reports strong Q1 profits

By Hollie-Rae Merrick 

Carnival Corporation has reporter stronger-than-expected earnings for the first quarter of 2015.

The cruise company made a net profit of $49 million, or $0.06 diluted earnings per share in the last quarter, compared to a net loss of $20 million in the last year period.

It attributed its strong earnings to a rise in onboard revenues which were up 8% compared to 2014. Onboard spending rose to $889 million from $850 million, although revenue from ticket prices dropped around 3.5%.

Net revenue yields increased 2% in the first quarter of 2015, better than the company’s December guidance of up to 1%. However, gross revenue yields dropped 3.1% due to changes in currency exchange rates.

Looking ahead to 2015, Carnival Corporation said advance bookings were ahead of 2014 and at higher prices.

Chief executive and president Arnold Donald said: “The year is off to a strong start achieving significantly higher earnings than the prior year and our previous guidance.

“Our onboard revenue initiatives drove particularly strong improvement in the first quarter with onboard yields more than 8% higher than prior year (constant dollar).

“We are experiencing an ongoing improvement in underlying fundamentals based on our successful initiatives to drive demand. Our efforts to further elevate our guest experience are clearly resonating with consumers and, notably, improving the frequency and retention of our loyal guests.”

Donald said he believed results had improved off the back of “ongoing public relations efforts and creative marketing campaigns” designed to attract new customers. He referenced the success of the company’s Super Bowl advertising campaign which generated five billion impressions online before the ad had even run on TV.

He added: “Consistent with many global companies, the strengthening of the US dollar has hampered our full-year earnings expectations, masking the 3% to 4% (constant currency) yield increase our collective brands are expecting to achieve.

“Our successful initiatives to drive both ticket and onboard revenue yields have improved our financial performance and we remain on track toward our goal of achieving double-digit return on invested capital in the next three to four years.”

Following a strong start to the year with bookings, Carnival said it expects full-year 2015 net revenue yields to increase 3% or 4% compared to 2014 and one point better than previous guidance for the year ahead.

However, changes in currency exchange rates means full-year 2015 earning expectations have been reduced by $219 million. Carnival said this was offset by an improvement in the company’s operating performance.

RCCL aims to double earnings per share over next three years

By Tom Stieghorst

Royal Caribbean Cruises Ltd. (RCCL) set a dual goal of boosting its return on invested capital to double digits and doubling its 2014 earnings per share over the next three years.

The “Double-Double” program was announced in its second-quarter earnings report, which showed net profit soared to $137.7 million, up from $24.7 million a year earlier.

In publicly announcing its financial targets, RCCL said "articulating clear and specific goals helps guide internal decision-making as well as better informing investors of the path of the business.”

Net yields for the quarter were up 2.6%, at the top of RCCL’s guidance, driven by strong booking trends for Europe and China sailings. There was continued softness in the Caribbean.

RCCL said that because of the strong quarter, it was boosting 2014 projected profit by $22 million to a range of $755 million to $777 million.

Second-quarter revenue rose to $1.98 billion from $1.88 billion a year earlier.

Carnival Corporation sees Q2 profits treble

By Phil Davies 

Carnival Corporation delivered an improved set of second quarter year on year financial figures and revealed that bookings for the remainder of 2014 are ahead of last year.

The world’s largest cruise conglomerate admitted yields in the current quarter – covering the main summer months - would be affected by a “significant” industry capacity increases in the Caribbean but raised its forecast for full year trading amid falling costs and an improved economic picture.

The group saw profits almost treble in the three months to May 31 to $106 million from $4 million in the second quarter of 2013, based on revenue up to $3.6 billion from $3.5 billion.

Carnival Corporation president and chief executive Arnold Donald said the company had been helped by better than expected revenue and lower cruise costs.

"We benefited from effective marketing initiatives, which combined with a gradually improving economic environment, led to revenue yield improvement for our continental European brands in the quarter compared to the prior year and is expected to continue through the remainder of the year," he said.

"In addition, we achieved a six percent improvement in fuel consumption."

Donald said Carnival expects revenue for 2014 to surpass last year’s level.

Advance bookings for the rest of 2014 are slightly ahead of last year and at higher prices, even though bookings for the next three quarters are slightly behind last year.

Donald said: “Collectively our brands are gaining momentum in our efforts to drive higher ticket prices and we continue to expect sequential improvement in revenue yields, despite a more competitive environment in the Caribbean this summer.

“We remain focused on further understanding our guests and refining the exceptional customer experience we provide.

“We have also made significant strides in our efforts to identify opportunities for cross-brand operational efficiencies. This work is still in the early stages, but we are making progress and beginning to see encouraging signs.”

The company hopes to have recovered from multiple cruise ship incidents last year involving Carnival Cruise Lines.

Several ships had power problems, including Carnival Triumph, which stranded passengers for days at sea in squalid conditions in February 2013.

"We believe we have reached a positive inflection point for our company as we return to earnings growth in 2014 and work hard to ensure that growth accelerates in the years to come," Donald said.

The third quarter saw the introduction of Princess Cruises’ Regal Princess in the Mediterranean and the brand’s first programme of sailings from China on Sapphire Princess.

Costa Cruises announced that it will position Costa Serena in China next year, bringing the company’s total to four ships based in the world’s fastest growing cruise market.

The corporation said it believes it is the largest provider of cruise holidays home-ported in China.

Fleet expansion helps Norwegian Cruise Line boost revenue

By Tom Stieghorst

Norwegian Cruise Line reported a net profit of $51.7 million in the first quarter, up from a $97.5 million loss a year ago.

Revenue rose 25.8%, to $664 million.

Results were helped by the addition of Norwegian Breakaway to the fleet in May 2013 and the Norwegian Getaway in January 2014.

After various special items are excluded, Norwegian said its adjusted first-quarter profit was $49.6 million, up from $12.9 million a year earlier.

Norwegian said it has authorized the buyback of up to $500 million of its stock. CEO Kevin Sheehan said the program allows Norwegian to be “flexible and opportunistic” in repurchasing shares at attractive levels.

The company completed a public offering in January 2013.

Norwegian Cruise Line hails 'seminal year' as profits surge

Norwegian Cruise Line’s president and chief executive said he was pleased with a “solid” performance during what had been a challenging year for the industry

The line reported fourth quarter profit of 19 cents per share and a 13.4% improvement in net revenue for the full year due to the addition of Norwegian Breakaway to the fleet.

Although net yields for the year were up 4.3% due to higher ticket prices and onboard spend, the figure was offset by three incremental scheduled dry docks.

President Kevin Sheehan said: “A year that began with a highly successful initial public offering, followed by other transactions which resulted in a strong balance sheet and credit metrics, and the launch of the first ship in our Breakaway class, Norwegian Breakaway, will undoubtedly be remembered as one of the seminal years in Norwegian’s 47-year history.

“The hard work of 25,000 Norwegian team members, all with a keen focus on our vision and mission, has been the catalyst for reaching these milestones, reporting solid financial performance in a challenging year for the industry and positioning the company for measured, disciplined growth.”

For the full year, the company reported adjusted earnings per share of $1.41, an increase of 45% from 2012 when the EPS was $0.97. Adjusted net income for the year was $295.8 million compared to $173 million last year.

At the beginning of this year the line took delivery of its latest ship in the fleet, Norwegian Getaway. Construction is ongoing on new builds Norwegian Escape and Norwegian Bliss, scheduled for delivery in 2015 and 2017 respectively.

Norwegian Cruise Line's profit up 33% in Q3

By Tom Stieghorst

Norwegian Cruise Line Holdings said it earned $170.9 million in the third quarter, up from $128.4 million a year earlier.

Revenue grew 18% to $797.8 million, up from $674.4 million.

"Improved ticket pricing and onboard spend, along with better-than-expected results from business-improvement initiatives drove incremental earnings in the quarter," CEO Kevin Sheehan said in a prepared statement.

Norwegian forecast that it will earn between $276 million and $286 million for the year.

The company has scheduled a conference call to discuss the results at 10 a.m. Oct. 29.