Royal Caribbean Again Lifts Outlook As Q3 Profit Beats View; To Buy Back Shares

(RTTNews) - Royal Caribbean Cruises Ltd. (RCL) on Friday reported a better-than-expected profit for the third quarter on strong demand for its Caribbean and European cruises, while revenues missed analysts' expectations. Looking ahead, the cruise-ship operator again raised its earnings outlook for fiscal 2015.

The company also plans to repurchase up to $500 million of its common stock and expects to complete the program by year-end 2016. This will begin with an agreement it has entered into with Morgan Stanely & Co. LLC to repurchase $200 million of the company's stock under an accelerated share repurchase transaction to be completed by the end of January 2016.

The company's net yields for the third quarter were up 5.1 percent on a constant-currency basis and up 0.2 percent as-reported. According to the company, close-in Caribbean and European demand as well as strong performance in Asia more than off-set further weakness in Latin America.

Net cruise costs excluding fuel were down 1.8 percent on a constant-currency basis and down 4.4 percent as-reported.

Royal Caribbean's third-quarter net income was $228.79 million or $1.03 per share, down from $490.25 million or $2.19 per share in the year-ago period.

The latest quarter's results include non-cash impairment charges totalling $399.3 million. These charges relate to Pullmantur's goodwill, the brand's trademark and trade names, and a reduction in the value of select vessels in the Pullmantur fleet.

Adjusted earnings were $2.84 per share, compared to $2.20 per share last year. Analysts polled by Thomson Reuters expected earnings of $2.71 per share. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 5 percent to $2.52 billion from last year's $2.39 billion. Analysts had a consensus revenue estimate of $2.54 billion.

Looking ahead, the company expects fourth-quarter adjusted earnings per share of about $0.90 per share. Analysts project earnings of $0.97 per share.

For fiscal 2015, the company raised its outlook for adjusted earnings per share to about $4.80 per share from the prior estimate in a range of $4.65 to $4.75 per share. The Street expects earnings of $4.72 per share for the year.

RCL is trading at $97.95, up $3.25 or 3.43 percent on a volume of 1.25 million shares.