Royal Caribbean Group''s revenue has fallen into the red for the first time ever after discovering a bookkeeping error amid losses that continue to remain in the billions of dollars.
The Richard Fain-led cruise major's top line came in at -$33.7m for the third quarter once the New York-listed company realised it had misclassified $36.9m in refunds in its ledger.
"This quarter we identified immaterial credits and refunds on bookings that were previously incorrectly recognized as cancellation revenue and reversed those revenues," it said in a statement.
The paybacks were offset only by $3.2m in actual passenger ticket revenue.
The Miami-based owner of 58 ships posted a $1.35bn deficit for the three-month period, marking the third consecutive quarter of losses since the pandemic shut down the cruise industry in March.
That loss is in stark contrast to the $883m profit it made a year ago during a time of record earnings and investment for the entire sector.
Loss per share higher than expected
Royal Caribbean's earnings adjusted for the impact of Covid-19 came in as a $1.2bn loss versus an $897m profit for the same time frame in 2019.
Loss per share came in at $5.62, missing analyst consensus of $5.12 loss per share and falling way below a $4.27 earnings per share arrived at a year earlier.
For the first nine months of 2020, the owner posted a loss of $44.3bn against a $1.61bn profit for the same time in 2019.
Royal Caribbean is staying afloat amid $3.7bn in cash derived from bonds and public stock, but it is spending up to $290m per month on keeping its entire fleet out of commission.
"We continue to aggressively manage our spend and take opportunistic actions to bolster our financial position," chief financial officer Jason Liberty asid.
"Moreover, we are optimistic that with the gradual resumption of cruise operations, our cash flow from operations will sequentially improve, driven by an increase in the inflow of customer deposits."
Royal Caribbean's shares, which trade on the Nasdaq stock market as RCL, gained 1.3% to $53.81 in New York by late afternoon Thursday.
