We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will Royal Caribbean (RCL) Q3 Earnings Let Down Investors?
Read MoreHide Full Article
Royal Caribbean Cruises Ltd. (RCL - Free Report) is scheduled to report third-quarter 2016 numbers on Oct 28, before the opening bell.
Last quarter, Royal Caribbean posted a 6.86% positive earnings surprise. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 23.09%.
Let’s see how things are shaping up for this announcement.
Royal Caribbean generates about 50% of its revenues from customers outside the U.S. where the majority pay with local currency. Thus, despite the slight weakening of the U.S. dollar in 2016 from the previous year, the negative currency impact is still significant and is expected to hurt top- and bottom-line performance in the to-be-reported quarter.
Moreover, lingering global uncertainty in economies like Europe and China is likely to limit revenue growth. Also, higher marketing and promotional spend along with increased cruise costs might hurt the quarter’s margins.
Nonetheless, strong booking trends, technological innovation, capacity growth and various profit-generating initiatives are expected to somewhat boost the quarter’s results. Particularly, overall demand for cruising in North America is expected to be solid, and the Caribbean, Alaska and Bermuda itineraries are all poised to have a strong quarter and produce yield improvements.
Earnings Whispers
Our proven model does not conclusively show that Royal Caribbean is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: The Most Accurate estimate for Royal Caribbean stands at $3.10 while the Zacks Consensus Estimate is pegged higher at $3.11. So, Royal Caribbean has an Earnings ESP of -0.32%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Royal Caribbean has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Live Nation Entertainment, Inc. (LYV - Free Report) has an earnings ESP of +2.04% and a Zacks Rank #3.
Time Warner Inc. has an earnings ESP of +1.49% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Will Royal Caribbean (RCL) Q3 Earnings Let Down Investors?
Royal Caribbean Cruises Ltd. (RCL - Free Report) is scheduled to report third-quarter 2016 numbers on Oct 28, before the opening bell.
Last quarter, Royal Caribbean posted a 6.86% positive earnings surprise. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 23.09%.
Let’s see how things are shaping up for this announcement.
ROYAL CARIBBEAN Price and EPS Surprise
ROYAL CARIBBEAN Price and EPS Surprise | ROYAL CARIBBEAN Quote
Factors Likely to Influence this Quarter
Royal Caribbean generates about 50% of its revenues from customers outside the U.S. where the majority pay with local currency. Thus, despite the slight weakening of the U.S. dollar in 2016 from the previous year, the negative currency impact is still significant and is expected to hurt top- and bottom-line performance in the to-be-reported quarter.
Moreover, lingering global uncertainty in economies like Europe and China is likely to limit revenue growth. Also, higher marketing and promotional spend along with increased cruise costs might hurt the quarter’s margins.
Nonetheless, strong booking trends, technological innovation, capacity growth and various profit-generating initiatives are expected to somewhat boost the quarter’s results. Particularly, overall demand for cruising in North America is expected to be solid, and the Caribbean, Alaska and Bermuda itineraries are all poised to have a strong quarter and produce yield improvements.
Earnings Whispers
Our proven model does not conclusively show that Royal Caribbean is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below.
Zacks ESP: The Most Accurate estimate for Royal Caribbean stands at $3.10 while the Zacks Consensus Estimate is pegged higher at $3.11. So, Royal Caribbean has an Earnings ESP of -0.32%. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Royal Caribbean has a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Boyd Gaming Corporation (BYD - Free Report) has an earnings ESP of +16.67% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Live Nation Entertainment, Inc. (LYV - Free Report) has an earnings ESP of +2.04% and a Zacks Rank #3.
Time Warner Inc. has an earnings ESP of +1.49% and a Zacks Rank #3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>