Royal Caribbean Cruise Lines Profitability Outlook

Royal Caribbean Cruise Lines Profitability Outlook

            Based out of Miami, Florida, and currently trading on the New York Stock Exchange for $13.72, the Royal Caribbean Cruise Lines Company (RCL) owns five cruise brands, Royal Caribbean International, Celebrity Cruises, Pullmantur Cruises, Azamara Cruises, and CDF Croisieres de France with 49,000 employees.

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            With a market cap of nearly $3 billion dollars along with a volume of over 9.3 million shares, RCL has a .85 price to earnings growth ratio, a profit margin at 7.18%, and an operating margin of 11.71%.

            Although RCL’s stock price has dropped 61% in the past year, the company has a 2.97% return on assets and 6.76% return on equity with a revenue of over $6.43 billion.  RCL currently operates with an operating cash flow $883 million while leveraging $6.97 billion in debt.

            These figures amount to an earnings per share ratio of 2.158 and a price to earnings ratio of 6.52 while paying out a dividend yield of 5%.  For the fiscal year ending December 31, 2008, RCL had a total revenue of $6.5 million and a cost of revenue of $4.4 million for a gross profit of $2.1 million which amounts to a net income of $573,722.

            Compared to its main rival Carnival Cruise Lines, Royal Caribbean Cruise Lines had a 2% better quarterly revenue growth as well as a 9% higher gross margin even as its market share is 1/8 CCL’s size.  RCL also has a five year PEG 6% higher than CCL.

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