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Royal Caribbean Expects To Incur Loss In Q3, FY20 - Quick Facts

While reporting its financial results for the second quarter on Monday, Royal Caribbean Cruises Ltd. (RCL) said it expects to incur a net loss on both a U.S. GAAP and adjusted basis for its third quarter as well as fiscal year 2020, but noted that the extent of the loss will depend on the timing and extent of the return to service.

On average, analysts polled by Thomson Reuters expect the company to report loss of $4.65 per share for the third quarter and loss of $13.79 per share for fiscal 2020. Analysts' estimates typically exclude special items.

Royal Caribbean noted that the extended suspension of cruising has significantly impacted bookings for the remainder of 2020, which are meaningfully lower than same time last year and at lower prices. However, the booked position for 2021 is trending well and is within historical ranges, the company said.

Royal Caribbean said it has implemented various programs to best serve its booked guests by providing the choice of future cruise credits or FCCs or the opportunity to "Lift & Shift" their booking to the same sailing the following year in lieu of providing cash refunds.

The company noted that for the booking period since its last business update, about 60 percent of the 2021 bookings are new, while the rest are due to the redemption of FCCs and the "Lift & Shift" program.

Pricing for 2021 bookings is relatively flat year-over-year when including the negative yield impact of bookings made with future cruise credits. However, it is slightly up year-over-year when excluding them, according to the company.

As of June 30, 2020, Royal Caribbean had $1.8 billion in customer deposits of which about $300 million correspond to fourth quarter 2020 sailings. Approximately 48 percent of the guests booked on cancelled sailings have requested cash refunds, the company said.

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