Royal Caribbean Cruises (RCC) has reported net income of $79.8 million, or $0.87 per share, on revenues of $656.4 million for the second quarter ended June 30, 1998, compared to net income of $38.4 million, or $0.65 per share, on revenues of $403.5 million for the second quarter of 1997.
The 1998 second-quarter income also includes a one-time charge of $9 million related to the plea agreement with the U.S. Department of Justice.
RCC also reported 2,889,536 passenger cruise days for a load factor of 105.0 percent for the second quarter of this year, compared to 1,765,459 passenger cruise days and a load factor of 104.8 percent last year.
According to RCC, the increase in revenue was due primarily to a 63 percent increase in capacity; approximately two thirds were due to the acquisition of Celebrity Cruises and one third from the Royal Caribbean International fleet.
Included in the current quarter results is a $31.4 million gain on the sale of the Song of America and a $32.0 million writedown of the Viking Serenade to reflect its estimated fair market value.
For the six-month period ended June 30, 1998, RCC reported net income of $157.3 million, or $1.82 per share, on revenues of $1.3 billion, compared to net income of $76.8 million, or $1.25 per share, on revenues of $798.0 million in 1997.
RCC said that the 1998 increase was driven almost entirely as a result of the capacity increase.
However, RCC has also managed to raise its 1998 operating margin by increased occupancy, higher rates and lower cost, compared to 1997.
Occupancy for the first six months of 1998 was 104.8 percent versus 104.1 percent the prior year.
In spite of the record results, the stock market reacted by sending RCC's common stock down $5 to $75 9/16. Analysts interviewed by Cruise Industry News attributed the drop to profit-taking.
There were also some concerns with the possible sale of the Viking Serenade, which represents approximately five percent of RCC's capacity. If the ship leaves service next year, along with the Song of America, the result may be flat earnings until the Vovager of the Seas is introduced in fall 1999.