Royal Caribbean Reports Record Fourth Quarter 2007 Earnings
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Royal Caribbean Reports Record Fourth Quarter 2007 Earnings
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Category: Worldwide
This is a press release selected by our editorial committee and published online for free on 2008-01-31
Royal Caribbean Cruises Ltd. (NYSE: RCL; Oslo) today announced record net income for the fourth quarter 2007 of $70.8 million, or $0.33 per share, compared to net income of $46.6 million, or $0.22 per share, in 2006. Revenues were better than expected, driven by stronger close-in bookings, while fuel costs were higher due to rising fuel prices. Revenues for the fourth quarter 2007 increased to $1.5 billion from revenues of $1.2 billion in the fourth quarter 2006.
Net income for the full year 2007 was $603.4 million, or $2.82 per share, compared to net income of $633.9 million, or $2.94 per share, for the full year 2006. Revenues for the full year 2007 increased to $6.1 billion from revenues of $5.2 billion for the full year 2006.
"It is very gratifying to see such a strong performance, especially in light of the broader consumer and economic environment," said Richard D. Fain, Chairman and Chief Executive Officer. "We are particularly pleased with the solid yield performance of our brands, which produced such healthy earnings despite significantly higher fuel costs." Higher fuel prices increased operating costs by $45 million in 2007, which reduced earnings per share by $0.21.
Fain continued, "Despite pressures on consumer spending, yields for the year were consistent with our original expectations, growing 0.3% on a comparable basis (i.e. excluding Pullmantur). This is a testament to the strength and momentum of our products."
Key metrics for the fourth quarter 2007, as compared to the fourth quarter 2006, were as follows:
-- Net Yields on a comparable basis increased 3.2%; higher than guidance of an increase in a range around 2%. Including Pullmantur, Net Yields increased 11.0%.
-- Excluding fuel, Net Cruise Costs per APCD on a comparable basis increased 3.4%; higher than guidance of an increase in a range around 2%. Including Pullmantur, Net Cruise Costs per APCD increased 12.1%.
-- Fuel prices increased 41% versus the fourth quarter of 2006, while fuel costs per APCD increased 19%, benefiting from energy saving initiatives and hedging. The average at-the-pump price for the quarter was $555 per metric ton versus $395 per metric ton in 2006.
-- Net Cruise Costs per APCD on a comparable basis increased 5.9%; higher than guidance of an increase in a range around 2%. Including Pullmantur, Net Cruise Costs per APCD increased 13.4%.
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