While the hurricanes had a negative impact on its overall revenue, Miami-based cruise company Royal Caribbean Cruises said it ended the third quarter of 2017 with record earnings.
The cruise giant’s net income for the three months ended September 30 reached USD 752.8 million, up from a net income of USD 693.3 million reported in the same period a year earlier. The company’s revenues for the quarter, which were at USD 2.56 billion, remained at a similar level to last year’s mainly due to the impact of an active hurricane season.
Financially, the storms were “unusually impactful” because of when and where they hit and the net effect was a cost to the company in excess of USD 55 million, according to Royal Caribbean. Most of this impact was from lost revenue, but there were also direct costs associated with the storms and with the company’s humanitarian efforts.
In addition, there were significant timing shifts across a wide range of activities as expenses were shifted between quarters to adjust to the storms. The company added that it still expects to generate earnings for the year within the increased range of guidance provided prior to the storms.
As the company is “only weeks away from crossing the finish line” of its Double-Double program, Royal Caribbean Cruises introduced its new three-year program designed to further drive performance, namely the 20/20 Vision.
Under the 20/20 Vision, which will continue to leverage the culture and discipline instilled by the Double-Double program, the company will look to improve its guest satisfaction and employee engagement, while delivering environmental commitments.
“20/20 Vision will serve as a guiding light for the organization over the next three years. The program builds on our proven formula for success: modest yield growth, strong cost control and moderate capacity growth, while incorporating key operational drivers of our long-term progress,” Richard D. Fain, chairman and CEO, said.
For the nine months ended September 30, the company’s net income reached USD 1.33 billion, against a net income of USD 1.02 billion reported in the same period a year earlier. Total revenues for the period were at USD 6.77 billion, up from USD 6.58 billion seen in the first nine months of 2016.
The company expects full year adjusted EPS guidance to be in the range of USD 7.35 to USD 7.40 per share. Excluding the cost of the hurricanes, adjusted EPS would have been in the range of USD 7.60 to USD 7.65 per share.
Royal Caribbean Cruises said that it is experiencing strong early booking trends for 2018 as booked load factors and APDs are higher than same time last year while the booking window has continued to extend.
“While still early in the booking cycle, the view for 2018 is encouraging and the company expects another year of solid yield and earnings growth.”