Royal Caribbean Reports Negative Revenue As COVID19 Brings Gigantic Losses

Bloomberg
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October 30, 2020

A view of the world’s largest cruise ship of Royal Caribbean Cruises, the 362-metre-long Symphony of the Seas, during its world presentation ceremony, berthed at a port in Malaga, Spain March 27, 2018. REUTERS/Jon Nazca

By John J. Edwards III and Jonathan Levin (Bloomberg) Royal Caribbean Cruises Ltd. reported negative revenue for the third quarter, a rare occurrence among major companies that illustrates the devastating effect of suspended sailings on the cruise industry.

Revenue was negative $33.7 million in the period, down from year-earlier positive revenue of $3.19 billion, Royal Caribbean said Thursday. The Miami-based company swung to an adjusted net loss of $1.2 billion from a profit of $896.8 million last year.

While the category of passenger-ticket revenue was positive last quarter, at $3.2 million, “onboard and other revenues” were negative $36.9 million. “This quarter we identified immaterial credits and refunds on bookings that were previously incorrectly recognized as cancellation revenue and reversed those revenues,” said Rob Zeiger, a Royal Caribbean spokesman.

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Royal Caribbean joins a small, unhappy club of S&P 500 companies reporting negative quarterly revenue. Cincinnati Financial Corp. this year reported first-quarter revenue of negative $99 million, slammed by investment losses.

In all, only 18 S&P 500 companies in the past quarter-century have reported negative revenue, including four in the quarter ended March 2008.

Like the rest of the cruise industry, Royal Caribbean is eagerly looking forward to the resumption of even a partial cruise schedule — though the current Covid-19 resurgence threatens that. Carnival Corp.’s Aida Cruises brand just canceled its planned October and November sailings from Germany after new lockdown restrictions in that country.

-With assistance from Tom Contiliano.
© 2020 Bloomberg L.P. 
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