Royal Caribbean's Record Results & Bullish Outlook

Cruise Week

Royal Caribbean CEO Richard Fain

Royal Caribbean stock soared Wednesday morning as the company reported not only record 2018 financial results, but expressed positive forward guidance for 2019.

In 2018, the company achieved net income of US$1.8 billion. Excluding fuel and exchange rates, net yields in 2019 are expected to grow a whopping 6.5% to 8.5% for RCL.

Royal Caribbean Chairman and CEO Richard Fain reported that by any measure 2018 was a stellar year. Furthermore, a strong Wave makes the CEO optimistic about 2019 as well.

Indeed, Wave Season has started on a strong note for the company, with the overall booked position for 2019 not only better than last year's record high, but accompanied with higher rates.

"We had more bookings during the first week of Wave than we have in any other week in our history, except the second week in Wave which was even better," said Fain.

Cruise Week reports that strong fundamentals are driving these financial results: "These strong fundamentals should not be a surprise as we have been very vocal about two important and positive trends," he said. "First, the trend in favour of experiences over material possessions, and second the favourable demographic shifts."

Fain has been talking a long time about how people have shifted their focus from buying TVs or cars to investing in memories and experiences. "That shift has become so powerful that I think it's now obvious to everybody," he contended. "At the same time the demographic makeup of our population keeps shifting in our direction." 

These two currents, he said, have become increasingly powerful. "Our company and our brands are well positioned to benefit from these trends," said Fain. "Obviously, no trend is perfectly linear, and no trajectory goes forever without interruption, but our direction and our overall progress appears inexorable."



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