Royal Caribbean Cruises, Ltd., the world's second largest cruise shipping group, says it has updated its full year Adjusted EPS guidance to a range of $4.65 to $4.75.
"The $0.15 increase versus April guidance is driven by beneficial currency and fuel rates. Better than expected performance in the Caribbean and China in Q2, and a modest increase in costs are essentially offsetting each other and are neutral to earnings. The cost increase in the second half of the year is for some additional marketing activities focused on 2016," the company said in a statement.
Constant-Currency Net Revenue Yields are now expected to increase in the range of 2.9% to 3.9%, versus previous guidance of 2.5% to 4.0%, and Net Cruise Costs excluding fuel are expected to be better than flat, versus previous guidance of flat to down 1%.
Bookings since the April earnings call have been healthy and the company continues to be booked ahead of last year in both load factor and available passenger day (APD). A solid Caribbean environment is more than off-setting softness on Latin American sailings associated with our Pullmantur brand.
Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects 2015 Adjusted EPS to be in the range of $4.65 to $4.75 per share.
"Momentum in the Caribbean continues at a solid pace, and our strong booked position in the third and fourth quarters gives us confidence as we move through the second half of 2015," said Jason T. Liberty, chief financial officer. "The trajectory of our brands is firmly on course for another record year of earnings, with healthy trends extending into the first quarter of 2016."
While it is too early to provide a detailed picture for 2016, first quarter bookings are running well ahead of last year at higher prices, with improvements in the Caribbean continuing at a robust pace.
Full year 2015 forecast:
Net Yields are expected to increase in the range of 2.9% to 3.9% on a Constant-Currency basis (down 1.1% to 0.1% As-Reported).
Net Cruise Costs (NCC) excluding fuel are expected to be better than flat on a Constant-Currency basis (down approximately 2.5% As-Reported), including some increased investment in marketing activities.
Adjusted EPS is expected to be in the range of $4.65 to $4.75 per share, a $0.15 increase from the mid-point of the company's previous guidance, driven by beneficial currency and fuel rates.
"The Double-Double introduced demanding but achievable targets for our organisation, and I am proud of our company's focus on delivering this program," said Richard D. Fain, chairman and chief executive officer. "We continue to focus on the strength of our brands to drive these improving results."