Royal Caribbean Cruises Ltd. (RCL, Financial) said full-year 2017 earnings increased 23.8% from the prior year, eclipsing the “Double-Double” earnings target set in 2014.
The Miami-based cruise company reported $7.53 in earnings per share for the year, up $1.45 from the prior year and outperforming the earnings target by 75 cents.
Company achieves the "Double-Double" in 2017
Royal Caribbean announced the “Double-Double” initiative in 2014. Under this program, the company targeted adjusted earnings of $6.78 per share and a return on invested capital of 10% by the end of 2017.
CEO Richard Fain praised the teams for achieving the “Double-Double” goal during the year through higher guest satisfaction and employee engagement scores. The company’s net yield increased 6.4% on a constant-currency basis during the year, up 2.5% from the prior year.
Company raises earnings guidance for 2018
Chief Financial Officer Jason Liberty said strong cruising demand and disciplined cost management contributed to “another record year” for Royal Caribbean. The company plans to introduce three new cruise ships by the end of 2018: Symphony of the Seas, Azamara Pursuit and Celebrity Edge. The three ships are expected to drive company yield growth, which has remained positive over the past eight years.
The company expects full-year adjusted earnings between $8.55 and $8.75 per share, reflecting an increase of approximately $1 from the prior year.
Royal Caribbean’s profitability ranks 7 out of 10, driven by expanding operating margins and consistent revenue growth. The company’s operating margin, net margin and return on equity outperform over 80% of global competitors.
Royal Caribbean’s share price increased 2.73% from the previous close of $127.22 as the company offered strong earnings guidance for the upcoming year.
Disclosure: No position in RCL.
